Boards of Directors is a process that no organization can do without. It is a meeting in which a select group of people participates, who study all the pressing problems of the company and try to find the right solutions. In this article, we will look in detail at the boarding process: what it is, who participates in it, what it does, and how it works.
What is a board of directors?
A board of directors is an assembly of people who represent the interests of the company and hold its executive positions. The main purpose of the board of directors is to preserve the assets of shareholders and provide them with a good return as a result of investing in the company. This board meets regularly to develop further strategies for action and to work for the improvement of the company.
Every formal organization should have a board of directors consisting of both executives within the company and employees outside the company.
How does the board of directors work?
The working principle and structure of a board of directors always depend on the type of company. Although the basic rules of all organizations are approximately the same, the details are determined only by the company itself. The details include such things as the frequency of board meetings, the number of board members who are obliged to attend each meeting, whenever it is held, and the principle and procedure for electing new board members.
What does the board of directors do?
The board of directors always acts on behalf of the auctioneers. The board manager assumes the legal and ethical responsibility to make sure that the records of the board match what is happening. The rest of the board is also committed to this. During the boarding process, issues such as:
- Hiring or firing higher-ranking employees
- Setting the remuneration of executives
- Decisions on mergers and acquisitions or other transactions
- discussing international and internal company crises and ways to solve or avoid them
- Setting company strategies and goals
- Setting stock option policies and more
Officers and other board members
Each member of the board of directors has his or her role:
- The chairman is the head of the board who has the power to manage the board and give out assignments while the other board members are equal to each other
- Vice-chairman -he takes the role of chairman when the real chairman is absent for some reason. His duties are the same as those of the chairman, sometimes they are called “elected” if they are expected to take the chair soon
- Treasurer – this is the director who is in charge of the company’s finances on a global scale. For example, he distributes the annual budget, manages financial policy, investments, etc.
- Secretary is the person who is responsible for organizing the board of directors and keeping appropriate records
- Executive director is a director who works in the company and works in a superior position
- A shadow or de facto director is a person who is there in fact, but not in paperwork. He runs the company but is not an official member of the board of directors
- Nominal director – is elected by creditors and auctioneers and has a permanent interest in the company that appointed them
- Prominent director – is a person who works on the image of the company and attracts public attention. He increases the company’s credibility and influence