A board is a group of people who manage for example a business or an organization. If you run a small business or startup, you need a board.
Corporations are required to have a board, this includes small businesses and start ups. If you start as a contractor, freelancer or other type of self-employed person, you don’t need one.
What does the board do?
The board functions as the top management of a business, and is responsible for, among other things, planning and strategizing, setting up budgets, hiring a CEO and in general overseeing what happens in the business. This includes overseeing both accounting and asset management.
The CEO should update the board on the business’ development every four months, either in meetings or in writing. The board should have regular meetings to follow up on what is happening in the business and make the necessary decisions. They’ll often ask the CEO or someone else from the management team to present necessary information at the meetings.
Their main responsibilities
The specific tasks that a board is required to do are determined by the law of the country where the business is registered, and there is usually a lot of room for interpretation when it comes to their tasks and responsibilities. It also depends on what the business needs: Small businesses do not have the same needs as large corporations.
In general they will
- represent the interests of shareholders and appoints directors to act on their behalf.
- set direction and monitor progress. In larger organisations, they have a more “hands-off” role, focusing on direction-setting and monitoring the organisation’s performance. The board is responsible for governing the organisation, not managing its day-to-day operations.
- Ensure legal compliance. They’re responsible for managing the operations and ensuring that the business operates in a legally compliant manner. The goal is to achieve the business’ objectives and to enhance and protect the interests of its shareholders, employees, and stakeholders.