In corporate management, the board of directors is the ultimate team which accepts responsibility for the entire company. The board determines vision, mission and goals and weighs in on issues as strategic planning, mergers and acquisitions capital appropriations, operational budgets, and compensation decisions. The board is accountable for the selection and firing of the CEO and also for determining executive pay rates, bonus payments, employee stock options. Most boards are organized around committees that concentrate on specific functions. The audit committee, for instance, works with the company’s auditors. The compensation committee is accountable for issues such as the salary of employees and stock options.
The job of a board is to serve as the corporate conscience, making sure that the work is completed and that the criteria are thought through before being proposed for approval by management. Some presidents with a great sense for discipline use the board to to enforce quotas, other performance measures and to assess the performance of their subordinate executives.
Directors generally do not get involved in management policy decisions at a low level. decisions, but they have a strong role in establishing major policies for the company. They make important decisions for the company, like closing facilities. They decide on where to invest the company’s cash and establish long-term goals for growth, quality as well as finances and people. The board should also establish guidelines to conduct its business and address legal issues like conflicts director independence community benefits, and the evaluation of the CEO.