What do boards really do

Boards of directors play a crucial role in the governance and oversight of a company. While their specific responsibilities may vary depending on the organization, industry, and jurisdiction, here are some of the key things that boards of directors are responsible for:

  1. Strategic Planning: Boards provide guidance on the company's overall strategy, mission, and vision. They help set goals, objectives, and priorities, and ensure that the organization is aligned with its purpose.
  2. Risk Management: Boards are responsible for identifying, assessing, and mitigating risks that could impact the company's success. This includes overseeing risk management processes, monitoring compliance with laws and regulations, and ensuring that the organization has adequate insurance coverage.
  3. Financial Oversight: Boards review and approve financial statements, budgets, and other financial reports. They also ensure that the company is financially stable, has adequate cash reserves, and is making sound financial decisions.
  4. Talent Management: Boards are involved in the selection, evaluation, and compensation of senior executives, including the CEO. They also ensure that the organization has a strong and diverse leadership team.
  5. Compliance and Governance: Boards ensure that the company is in compliance with all relevant laws, regulations, and industry standards. They also establish and maintain effective governance structures, policies, and procedures.
  6. Crisis Management: Boards play a critical role in managing crises, such as natural disasters, product recalls, or reputational issues. They provide guidance and support to the organization during times of crisis.
  7. Monitoring Performance: Boards regularly review the company's performance, including its financial results, operational efficiency, and progress towards strategic goals.
  8. Setting Company Culture: Boards help shape the company culture by establishing values, principles, and behaviors that guide the organization's actions and decisions.
  9. Engaging with Stakeholders: Boards engage with various stakeholders, including shareholders, customers, employees, and the broader community, to understand their needs and concerns.
  10. Providing Expertise: Boards bring together a diverse group of experts with different backgrounds, skills, and experiences. They provide guidance and advice to the organization, drawing on their collective knowledge and expertise.
  11. Fostering Innovation: Boards encourage innovation and entrepreneurship within the organization, recognizing the importance of staying ahead of the competition and adapting to changing market conditions.
  12. Ensuring Transparency and Accountability: Boards ensure that the company is transparent in its operations, financial reporting, and decision-making processes. They also hold executives accountable for their actions and decisions.

In summary, boards of directors play a vital role in guiding and overseeing the organization, ensuring that it is well-managed, financially stable, and committed to its mission and values.