A board of directors (B of D) may well be a company’s body, chosen by shareholders of publicly owned businesses to define strategy and oversee management.
The board usually meets daily. A board of directors is additionally present in certain commercial firms and non-profit organisations.
A company’s board of directors is an elected body that features high-level corporate position holders and represents the company’s shareholders.
The composition of the BOD varies by organisation. A CEO, board chairman, directors, non-executive directors, CFO, vice-president, zonal leaders, and other executives are usually present.
A BOD is required by law for public companies, but it’s optional for non-profits and private companies. The BOD’s goal is to safeguard the rights and interests of stakeholders and investors while also protecting the assets they have invested within the corporation.
A board of directors is an organization’s top governing authority that participates in board meetings to form strategic company decisions.
A board of directors is also a gaggle of officials chosen by a company’s shareholders. State regulations require public corporations to possess a board of directors.
The principal-agent relationship idea underpins the connection between a BOD and shareholders. The principals or owners are the stockholders during this case.
The BOD is the agent in charge of ensuring the protection of shareholders’ funds. As a result, the board must assure organisational efficiency to maximise profit, which is ready to extend shareholder wealth.
In general, the board of directors establishes broad policies and makes significant decisions on behalf of the corporation and its shareholders as a fiduciary.
Mergers and acquisitions, dividends, and massive investments, moreover because the hiring and firing of senior executives and their compensation, all comprise the purview of a board of directors.