A board of directors (also called”BoD” or “board” or “BoD”) is a group of people elected by shareholders of a business to represent their interests. Board members create policies for view overall company oversight and management, as well as protecting the assets of shareholders. The board serves as an intermediary between a business and its investors, overseeing and ensuring that the company is operating in a legal and responsible way.

This involves setting the tone of all employees at the top, by establishing the essential rules of ethics. It approves corporate policies that aim to create long-term value. It also selects a chief executive officer who oversees the CEO and upper management in running the company’s business, including allocating capital to grow and assessing and managing risks.

The board also examines the financial reports and ensures compliance with the laws and regulations. It also communicates with all stakeholders, like employees customers, suppliers and customers, and the local community, to listen to their concerns.

The board of a company should comprise a mix of inside and outside members that are a mix of age, gender and ethnicity. Companies with a higher diversity of board members tend to do better financially. A diverse board is more likely than to not have a range of perspectives and opinions that could lead to better decisions.

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