Core Responsibilities of Boards of Directors

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In a world in which risks and threats are constantly changing the main responsibility of a board is to oversee the company’s mission. A board of directors is independent of the company’s management, and focuses more on the big issues facing the company than its day-to-day operations. It determines the corporate’s strategy, evaluates executive pay and rewards, offers input on financial issues as well as invests in the company and manages the risk.

In executing this duty the board must make decisions based on its belief that will help in the success and growth of the company. This includes weighing the following essential elements:

Identifying and analyzing the potential risks of an enterprise. The board must be able to examine and identify the legal, financial and security risks posed by a company. It should also formulate strategies to mitigate risks that could be posed by new and emerging threats like climate change digital currencies, artificial intelligence, geopolitical crises, ESG and many more.

It is important to ensure that the company operates in accordance with the applicable regulations. This includes ensuring that the company has accurate records, pays taxes and provides proper disclosures to shareholders as well as other stakeholders.

Finding and evaluating key people. The board must recruit qualified individuals to serve in the positions of president and chair, secretary and treasurer (or combined secretary/treasurer), and other officers as necessary. This includes setting criteria for choosing the board members, evaluating the candidates’ applications in interviews, and making selections.

Supporting members who are new or existing of the board. It is the duty of each board member to help each succeed in achieving their goals. It is crucial that board members attend meetings either in person or via video, take part, and share their knowledge and experience.