Boards of directors responsibilities include three formal duties that every member must comply with: Duty of Care -Board members have the legal obligation to act in the best interests of the organization and to make decisions with the purpose of the business in mind. Duty of Loyalty – Each member must put aside their personal and professional interests when making decisions on behalf of the company. Obligation to obey — Each member has a legal obligation to ensure that the organization is in compliance with all applicable laws and adheres governance standards.
Boards of directors perform more complex responsibilities than these three. These duties vary depending on the needs of the particular organization. For example If your company is a public entity then a major part of your director’s duties is overseeing the CEO’s performance and making sure the financial statements are in order. If you’re www.boardroomnow.info/working-board-vs-governance-board a young company within your company the board might be more on setting strategic goals and determining the direction of your business.
A board’s role also involves the maintenance of a balance in risk management. For instance, your board may be required to intervene and prevent any crises that could harm your company’s reputation even if it’s not their legal or ethical responsibility. Boards must also ensure their members are aware of the risks of being on their board and are prepared to manage these risks appropriately.
Every board member has an important and distinct role in assisting your business to succeed. Therefore, it’s important to be aware of the roles and responsibilities of your board members and how they are connected to your company’s strategic goals. Aprio’s software for board portals for instance can help you streamline your duties and run meetings efficiently.
