What Is Board Of Directors Of A Company?

What Is Board Of Directors Of A Company?


A board of directors is a group of people who, as elected or appointed officials, act on behalf of shareholders to oversee the activities of a company. The board approves the hiring of senior executives, sets strategy, and acts as a check on management. In most cases, the board of directors is elected by the shareholders of a company. composition and size vary by company and are typically governed by the company's articles of association.


The responsibilities of a board of directors include:

  • approving corporate strategy
  • overseeing implementation of the strategy
  • monitoring performance
  • ensuring the stewardship of assets
  • maximizing shareholder value


The board of directors is accountable to shareholders for the performance of the company. In many jurisdictions, shareholders can sue the board for breach of fiduciary duty.

What Is Board Of Directors Of A Company?


A board of directors is a group of people who, as elected or appointed officials, act on behalf of shareholders to oversee the activities of a company. The board approves the hiring of senior executives, sets strategy, and acts as a check on management. In most cases, the board of directors is elected by the shareholders of a company. composition and size vary by company and are typically governed by the company's articles of association.


The responsibilities of a board of directors include:

  • approving corporate strategy
  • overseeing implementation of the strategy
  • monitoring performance
  • ensuring the stewardship of assets
  • maximizing shareholder value

  • The board of directors is responsible for hiring and firing the CEO, setting corporate strategy, and approving major decisions such as mergers and acquisitions. They also approve the company's annual budget and monitor the CEO's performance.


    Directors are typically elected to serve four-year terms. Some companies have staggered terms, so that only a portion of the board is up for election each year. This makes it difficult for shareholders to replace the entire board at once if they're unhappy with management.


    The board of directors is typically made up of people with significant experience in business, finance, and management. Most boards also include at least one outside director who isn't affiliated with the company, such as a former CEO of another company or a prominent academic.


    Board meetings are typically closed to the public, although some companies allow shareholders to attend or listen in on conference calls. Minutes from these meetings are typically made available to shareholders after they're approved by the board.

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