The responsibilities of directors on boards include three formal duties that each member must fulfill: Duty of Care -Board members have an obligation under law to act in the best interests of the company and make decisions keeping the mission of the company in mind. Duty of Loyalty All members must put their personal and professional interests aside when making decisions for the company. Duty of Obeyance – Every member is legally bound to ensure that their company abides by all applicable laws and adheres to the requirements of good governance.
Boards of directors perform more complicated responsibilities than these three. These duties vary depending on the needs of the particular organization. If your company is a publicly traded corporation, your board’s responsibilities will likely include overseeing the CEO, and making sure that the financial statements are accurate. But if you’re an internal startup, your board might concentrate more on establishing strategic goals and setting the direction for your company.
The role of a board also includes making sure that there is a balance in the management of risk. Your board may be required to intervene in a crisis that could harm your company’s image even though they are not legally or ethically responsible. The board must also ensure that their members are aware of the risks of serving on their boards, and are prepared to handle these risks in a responsible manner.
Ultimately, all board members have a crucial and distinct role to play in helping your company succeed. This is why it’s crucial to be aware of the duties assigned to your board and how they relate to your organization’s strategic goals. Fortunately, tools such as Aprio’s board portal software can assist you in reducing your responsibilities and manage meetings efficiently.
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