Core Responsibilities of Boards of Directors
In a time where risks and threats are constantly changing, a board’s primary responsibility is to oversee the company’s mission. The board of directors operates independently of a company’s management and focuses on the company’s major issues rather than its daily operations. It establishes corporate strategy, assesses executive pay and rewards, gives input on financial matters, makes investments and manages the risk.
In order to fulfill this duty, a board must make the decision that they believe in good faith will promote the overall success of the organization. This means taking into consideration the following essential elements:
Analyzing and identifying the potential risks an enterprise could face. A board must identify, assess, and monitor the financial, security, and legal risks that are posed by a corporation. It should also devise strategies to mitigate the risk posed by threats that are emerging such as climate change artificial intelligence, digital currency geopolitical crises, ESG and many more.
It is essential to ensure that a corporation operates in accordance with applicable regulations. This includes ensuring that a corporation maintains accurate financial records, pays taxes and provides appropriate disclosures to shareholders and other stakeholders.
Evaluation of key people. The board must recruit qualified individuals to serve in the positions of president and chair, secretary and treasurer (or combined secretary/treasurer), and other officers as necessary. This includes establishing criteria for the selection of board members, evaluating the candidates’ applications in interviews, and making selections.
Providing support to the board members both new and old. Every board member is accountable to assist fellow board members in achieving their goals. This means they must take part in meetings and attend in person or online, and contribute their insight and knowledge to discussions.
www.boardroomnow.info/what-is-the-difference-between-oversight-and-management