The legal structure of an organization as well as its bylaws define the responsibilities and powers of the management board. The specific powers of the board may also be outlined in the bylaws. In spite of the specific terms, most boards do not have unlimited power. They delegate decision-making to senior managers (or, in the case of non-profits, to staff). The primary function of the board is to decide if these decisions add up to satisfactory results for the organization as a whole.
In the case for large public companies directors are legally required to serve as fiduciaries, representing shareholders of shares/stocks and ensuring that the management does not waste money, destroy assets, or break the law. In a way the board must be able to evaluate the CEO’s performance and make decisions regarding the compensation of the CEO.
Many boards are involved with many other areas as well. These include risk and resilience sustainability corporate strategies technology and digitization and corporate strategy. To achieve this, boards need to be able to accept more responsibility and do more, as http://www.herbboardroom.com they must keep up with new areas of concern that might arise.
However when the board begins to take over the responsibilities of management by taking decisions that should only be taken by the full board or taking on the management responsibilities, it is at risk of upsetting a structure that was carefully designed for high-efficiency organizational success. This could lead to a higher turnover of managers and CEOs as they lose faith in the board’s ability to manage issues when they get wrong.
