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The board of directors in corporate management is the most important team that takes on the responsibility for a business. The board is the one who decides on vision, mission, and goals and also weighs in with strategic planning, mergers and acquisitions capital budgets, operating budgets, compensation decisions and many other issues. The board is accountable for the selection and firing of the CEO and also for determining executive pay rates including bonus payments, profit sharing and employee stock options. Boards are often organized around committees that are focused on specific functions. For example the audit committee works with the company’s auditors. Meanwhile, the compensation committee oversees issues like salary rates and stock option grants.
The board is the primary source of conscience of an organisation. They make sure that all assignments are completed and that criteria are carefully considered prior to being presented to management to be approved by management. Some presidents with a great sense of discipline use the board as a method to enforce quotas, other performance indicators, and to evaluate the performance of their subordinate executives.
Directors are not part of the low-level management decisions but they are a key player in the creation of big policies for the company. They make crucial decisions for the company, including closing facilities. They decide on how to invest the funds of the company and set long-term goals in terms quality growth, financial stability and personnel. The board must also establish guidelines to conduct its business and address legal issues like conflicts director independence community benefits, as well as the evaluation of the CEO.
