A board of directors, also referred to as « BoD » or a « board », is a set of individuals elected by shareholders to represent the interests of the company. Board members set policies for overall company oversight and management, while protecting the assets of shareholders. The board acts as a liaison between the shareholders of the company and the company making sure that the business is run in a legally-sound and responsible way.

This click to find out more includes setting the tone for the entire organization at the top by establishing fundamental rules of ethical conduct. It also approves corporate strategies that are designed to create sustainable long-term value, selects the chief executive officer, and supervises the CEO and senior management in operating the business of the company, which includes allocating capital for growth and assessing and managing risks.

The board also examines financial reports and ensures that the operations of the company are in line with the laws and regulations. In addition it engages with all the various stakeholders, including employees, customers, suppliers and the local community as well as other stakeholders, to be aware of their concerns. It also aims to have a positive impact on these communities.

The board of a company should comprise a mix of insiders and outside members that are a mix of age, gender, and ethnicity. In fact, companies with more diversity on their boards usually perform better financially than those without. A diverse board is more likely than to not have a range of opinions and perspectives that can lead to better decisions.