The management board performs a variety of functions, such as establishing strategy, managing finances developing relationships with the community and setting ethical standards. Boards choose and supervise the CEO; they establish vision, mission, and strategic thrusts; they build relationships with the community; they set the management procedures for governance, quality and compliance they also address organizational changes resulting from changing conditions and regulatory pressures.
Boards are legally liable as fiduciaries to represent owners/shareholders and investors. They set the rules for dividends and payouts, hire/fire and compensate upper management and establish corporate rules. They also maintain a close communication with management, and also represent the company. The chair of the board, often chosen from the board members, is a leader of the entire board. Most often, they are a non-executive director (NED) and serve as the liaison with the chief executive officer.
The primary role of the board is to serve as a steward to the organization. However some boards cross the line into management, seeking to take on things by themselves instead of making sure that activities are line with the organization’s commitment to its mission. Boards should concentrate on balancing their oversight responsibilities and their responsibility for ensuring organizational success. The most efficient way to accomplish this is through the use of committees. Audit as well as compensation and nominating committees, for instance, have become popular ways of examining complex issues. These committees are required to report back to the board in general on their findings.