What is a board

A board is a group of people who lead and manage a company, organization, or similar.

What does the board do?

The board functions as the top management of a company and is responsible for, for example, creating strategies and organizing the business, creating budgets and guidelines, hiring a CEO and/or overseeing what happens in the company. This includes having control over both accounting and asset management.

The tasks of a board are determined by the government and the law. There is a lot of room for interpretation in the tasks and responsibilities of a board, and there is also a lot of variation in what a company needs. For example, smaller companies do not have the same needs as large corporations.

A board should have regular meetings to follow up on what is happening in the company and make necessary decisions. The board often asks the CEO or other responsible persons in the company to prepare matters for the board meetings with information that the board must consider and make decisions based on. The CEO should keep the board informed about the company’s progress by providing updates every four months, either during a meeting or through a written report.

The main responsibilities of the board

  • Representing shareholders: The board is responsible for looking out for the shareholders’ interests. They appoint directors who are expected to act in the best interest of the shareholders and the company. It’s important that these directors fulfill their fiduciary duties, prioritizing the needs of the company and its shareholders.
  • Direction and oversight: In bigger organizations, the board typically takes a more reserved, “hands-off” approach. The board primarily concentrates on setting strategic goals and monitoring how well the organization is doing overall. Their role isn’t about handling everyday tasks; instead, they provide governance and direction, helping steer the organization from a broader perspective.
  • Ensuring legal requirements: It’s the board’s responsibility to ensure that the company’s operations and its management adhere to all legal requirements. This is critical not only for meeting the company’s goals but also for safeguarding and promoting the interests of shareholders, employees, and all other stakeholders involved.