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The Board of Directors in Corporate Management

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In corporate management, the board of directors is the most important team that takes on the responsibility of the entire business. The board makes decisions on vision goals, mission, and values and also weighs in with strategic planning, mergers and purchases operating budgets, capital budgets, compensation decisions and many other issues. The board is also responsible for the hiring and firing of the CEO, as well as determining executive pay rates as well as bonuses, profit sharing and employee stock options. Boards are often organized around committees which focus on specific tasks. The audit committee, for instance, works with the company’s auditors. The compensation committee is responsible for matters such as salary and stock options.

The board is the primary source of conscience of an organisation. They ensure that all work is completed and that the criteria are carefully considered prior to being presented to management to be approved by management. Some presidents who have a strong sense of discipline use the board as a way for imposing quotas, other performance measures and to assess the performance of their subordinate executives.

Directors aren’t involved in the low-level management decisions but they play a major role in setting up big guidelines for a company. They make decisions that have a major impact on the company such as whether to close facilities, for instance. They decide how to invest the funds of the company and set long-term goals in terms of quality growth, financial stability and employees. The board must also establish guidelines for its conduct and address legal matters like conflicts of interest director independence the community benefit, and the evaluation of the CEO.

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