About > Corporate Governance > Board of directors’ responsibilities
Board of directors’ responsibilities
The roles of the board of directors include:
- Establish vision, mission and values
- Policy making
- Set strategy and structure
- Decision making
- Delegate to management
1) Establish vision, mission and values
- Determining the company’s vision and mission to guide and set the pace for its current operations and future development
- Determining the values to be promoted throughout the company
- Determining and reviewing company goals
- Determining company policies
2) Policy making
- Making Policies that define, focus and differentiate responsibilities among the board, the management, and the staff
- Reviewing and approving well-written policies that lead to more efficient board functioning
- Developing a policy that covers the issue and leaving implementation of the policy to management
3) Set strategy and structure
- Review and evaluate present & future opportunities, threats and risks in the external environment, current and future strengths, weaknesses and risks relating to the company
- Determine strategic options, select the most appropriate ones, and decide the means to implement and support them
- Determine the business strategies & plans that underpin the corporate strategy
Ensure that the company’s organizational structure & capability are appropriate for implementing the chosen strategies
4) Decision making
- Decision making involves making choices about the organization’s vision, mission, and strategies
- Boards make decisions about issues that are strategic and significant
- As decision makers, boards can also delegate non-governance types of decisions to others
5) Delegate to management
- Delegate authority to management, and monitor & evaluate the implementation of policies, strategies and business plans
- Determine monitoring criteria to be used by the board
- Ensure that internal controls are effective
- Communicate with senior management
The responsibilities of BOD include:
- Approve the corporate strategy
- Experiment business model and identify key performance measures
- Identify risk areas and oversee risk management
- Plan for and select new management executives
- Design executive compensation packages
- Ensure the integrity of financial statements
- Approve major asset purchases
- Protect company assets and reputation
- Represent the interest of shareholders
- Ensure the company complies with laws and codes
- Free from conflicts that compromise judgment
- Able to take positions in opposition to management
- Represent companies view and account to the public
- Leading the company properly
- Establish appropriate internal control
- Decide formal schedule of matters of the meeting
- Determine the company`s mission and purpose
Types of decisions requiring board of directors’ approval
- Cases that critically impact the organization’s vision, missions, and strategies
- Plans that are strategic and significant
- Cases, issues, problems, solutions that are strategic and significant
- Financial matters that are strategic and significant
The role and responsibilities of the chairman
- The role and responsibilities of a Chairperson can be summarized under five areas:
- To provide leadership.
- To ensure the Management Committee functions properly.
- To ensure the organization is managed effectively.
- To provide support and supervision to the chief officer and senior team.
- To represent the organization as its figurehead.