What is Board of Directors?
A board of directors is an elected group of individuals that represent shareholders.
The directors of the company collectively are referred to as a board of directors.
The board is a governing body that typically meets at regular intervals to set policies for corporate management and oversight. Every public company must have a board of directors.
Directors, individually and collectively, as a board of directors, have a duty of corporate governance.
Roles & Responsibility of Board of Directors:
– Provide entrepreneurial leadership of the company
– Represent company view and account to the public
– Decide on a formal schedule of matters to be reserved for board decision
– Determine the company’s mission and purpose (strategic aims)
– Select and appoint the CEO, chairman and other board members
– Set the company’s values and standards
– Ensure that the company’s management is performing its job correctly
– Establish appropriate internal controls that enable risk to be assessed and managed
– Ensure that the necessary financial and human resources are in place for the company to meet its objectives
– Ensure that its obligations to its shareholders and other stakeholders are understood and met
– Meet regularly to discharge its duties effectively
For listed companies:
– Appoint appropriate NEDs
– Establish remuneration committee
– Establish nominations committee
– Establish audit committee
Assess its own performance and report it annually to shareholders
Submit themselves for re-election at regular intervals. All directors in FTSE 350 companies should be put forward for re-election every year.