Board

Board
See also
Board of directors Nominee director Adhocracy Regional office Government Works committee Project steering committee Unity of direction Work team

The Board is the executive body of a public limited liability company, LLC, cooperatives, foundations and other legal entities, representing these institutions and being responsible for the implementation of its goals, contracts or commitments entered into.

Commonly it is a small group of people appointed by the Board of Directors or the General meeting of shareholders. Regardless of the obligations of the members of the Board, persons appointed may serve various functions within the enterprise at different positions. The activities of the Board is subject to the control of the Supervisory Board.

Some board members are also directors, employees working at the highest management level. External directors could be elected to the Board to perform tasks in specific area of expertise, i.e.: financial management, legal issues, etc. However, they are not full-time staff employed by the organization. The Board plays an important role in arranging the company's strategy and monitoring its correct implementation. The Board also has insight in all the important decisions taken by the senior management and determines the height of the remuneration of the managers at this level.

Organization

The organization of a board of directors will vary depending on the type of legal entity and the specific laws and regulations that govern it. However, in general, a board should be organized in a way that allows it to effectively govern and oversee the organization. This may include:

1. Clearly defined roles and responsibilities for board members: Each board member should have a specific role and set of responsibilities, such as serving as chair, treasurer, secretary, or a member of a specific committee.
2. A balance of internal and external members: Internal members, such as employees or executives of the organization, can provide valuable insight into the day-to-day operations and activities of the organization. External members, such as independent directors or representatives from other organizations, can provide valuable perspective and oversight.
3. Regular meetings: The board should meet regularly, at a frequency that is appropriate for the organization and its needs. Meetings can be in-person or virtual.
4. A quorum: A quorum is the minimum number of board members that must be present at a meeting in order for decisions to be made. This should be clearly defined in the bylaws or governing documents of the organization.
5. A system for decision making: The board should have a clear system for making decisions, such as a majority vote or consensus-based decision making.
6. Adequate resources: The board should have access to the resources and information it needs to effectively govern the organization, such as financial statements, performance metrics, and legal advice.
7. A clear communication and reporting system: The board should have regular reports from the management and committees, as well as the ability to communicate with stakeholders and shareholders.
8. An effective Chairman and CEO: The Chairman and CEO should work together effectively to provide a clear direction and vision for the company.
9. Code of conduct and Conflict of Interest Policy: A clear Code of conduct and Conflict of Interest Policy should be in place to ensure that the Board members act in the best interest of the company.

Summary

In summary, the Board is the governing body of a legal entity, such as a public limited liability company or a cooperative, that is responsible for representing the institution and implementing its goals. The Board is usually composed of a small group of people appointed by the Board of Directors or the General Meeting of Shareholders. Board members may serve various functions within the enterprise and may be both internal and external to the organization. The Board is responsible for setting the company's strategy and monitoring its implementation, as well as having oversight of important decisions made by senior management and determining the remuneration of those managers. The Board's activities are subject to the oversight of a Supervisory Board.

References

• Berger, A. N., Kick, T., & Schaeck, K. (2014). Executive board composition and bank risk taking. Journal of Corporate Finance, 28, 48-65.