Board of directors: Difference between revisions
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A '''board of directors''' is a body of elected or appointed persons who jointly oversee the activities of an organization. Its activities are governed by powers, duties, and responsibilites delegated to it or conferred on it by authority outside itself. The body is sometimes referred to as the board of trustees, governors, or managers. It is often simply referred to as "the board." | A '''board of directors''' is a body of elected or appointed persons who jointly oversee the activities of an organization. Its activities are governed by powers, duties, and responsibilites delegated to it or conferred on it by authority outside itself. The body is sometimes referred to as the board of trustees, governors, or managers. It is often simply referred to as "the board." | ||
In an organization with voting members, the board | In an organization with voting members, the board acts on behalf of, and is subordinate to, the organization's full assembly, which usually chooses the members of the board. In a stock corporation, the board is elected by the stockholders and is the highest authority in the management of the corporation. In a nonstock corporation with no general voting membership, (for example a university), the board is the supreme governing body of the institution.<ref>{{cite book | last = Robert III | first = Henry M. | authorlink = | coauthors = William J. Evans, Daniel H. Honemann, Thomas J. Balch | title = Robert's Rules of Order Newly Revised | publisher = Da Capo Press | date = 2000-10-01 | location = Cambridge, MA | pages = | url = | doi = | id = | isbn = 0-7382-0307-6 }}</ref> | ||
Typical duties of boards of directors include: | Typical duties of boards of directors include:<ref> {{cite web|url=http://www.managementhelp.org/boards/brdrspon.htm |title=Overview of Roles and Responsibilities of Corporate Board of Directors |accessdate=2008-01-26 |last=McNamara |first=Carter |work=Free Management Library |publisher=Authenticity Consulting, LLC }}</ref> | ||
* Determining the organization's mission and purpose | * Determining the organization's mission and purpose | ||
* Governing the organization by establishing broad policies and objectives | * Governing the organization by establishing broad policies and objectives | ||
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* Accounting to the stakeholders for the organization's performance | * Accounting to the stakeholders for the organization's performance | ||
The legal responsibilities of boards and board members vary with the size and formality of the organization, and with the legal jurisdiction within which it operates. The requirements for public corporations are typically much more rigorous and complex than those for other types. | |||
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Revision as of 19:03, 26 January 2008
A board of directors is a body of elected or appointed persons who jointly oversee the activities of an organization. Its activities are governed by powers, duties, and responsibilites delegated to it or conferred on it by authority outside itself. The body is sometimes referred to as the board of trustees, governors, or managers. It is often simply referred to as "the board."
In an organization with voting members, the board acts on behalf of, and is subordinate to, the organization's full assembly, which usually chooses the members of the board. In a stock corporation, the board is elected by the stockholders and is the highest authority in the management of the corporation. In a nonstock corporation with no general voting membership, (for example a university), the board is the supreme governing body of the institution.[1]
Typical duties of boards of directors include:[2]
- Determining the organization's mission and purpose
- Governing the organization by establishing broad policies and objectives
- Selecting, appointing, supporting and reviewing the performance of the chief executive
- Insuring the presence of adequate financial resources
- Approving annual budgets
- Accounting to the stakeholders for the organization's performance
The legal responsibilities of boards and board members vary with the size and formality of the organization, and with the legal jurisdiction within which it operates. The requirements for public corporations are typically much more rigorous and complex than those for other types.
References
- ↑ Robert III, Henry M.; William J. Evans, Daniel H. Honemann, Thomas J. Balch (2000-10-01). Robert's Rules of Order Newly Revised. Cambridge, MA: Da Capo Press. ISBN 0-7382-0307-6.
- ↑ McNamara, Carter. Overview of Roles and Responsibilities of Corporate Board of Directors. Free Management Library. Authenticity Consulting, LLC. Retrieved on 2008-01-26.