Boards of Directors Responsibilities

Directors of boards have three formal responsibilities that all members are required to follow. Duty of Care – Board members are legally required to act in the best interest of the organization, and make decisions with the company’s mission at forefront. Duty of Loyalty Each member must put his personal and professional interests aside when making decisions for the company. Duty of Obedience — Every member has a legal obligation to ensure that the business adheres to all applicable laws and adheres to the highest governance standards.

Directors of boards have more complicated responsibilities than the three mentioned above. These responsibilities vary based on the needs of the particular organization. For example If your company is a publicly traded corporation, it’s likely that the majority of your director’s duties is monitoring the CEO and ensuring that the financial statements are correct. If you’re a newcomer within your business, your board may focus more on setting strategic goals and determining direction of your business.

The board’s responsibilities also include making sure that there is a balance in the management of risk. Your board could be obligated to intervene in a situation that could harm your company’s image even though they are not legally or ethically responsible. Boards must also ensure their members are aware of the potential risks associated with being on their boards and are prepared to handle the risks in a responsible manner.

Every board member has a unique and important role in helping your business grow. It is essential to be aware of the duties of your board and how they are connected to your organization’s goals. Aprio’s board portal software for instance, can help you streamline your duties and run meetings efficiently.

http://www.boardroomnow.info/what-is-the-difference-between-oversight-and-management/