Glossary / Board of Directors
The board of directors is a group of individuals elected by the shareholders of a company to oversee its management and make important decisions on behalf of the shareholders. The board typically consists of a mix of internal and external directors, with internal directors being executives or employees of the company and external directors being independent individuals with relevant expertise. The main responsibilities of the board of directors include setting the company's strategic direction, appointing and monitoring the performance of the CEO and other top executives, approving major financial decisions such as mergers and acquisitions, and ensuring compliance with legal and regulatory requirements. They also have a fiduciary duty to act in the best interests of the shareholders and to protect their investments. The board of directors usually meets regularly to discuss and make decisions on various matters affecting the company. They may also form committees, such as an audit committee or compensation committee, to focus on specific areas of governance and oversight. The composition and structure of the board of directors can vary depending on the company and its specific needs. Some boards may have a chairman or chairwoman who leads the meetings and represents the board to external stakeholders, while others may have a separate CEO and chairman. The size of the board can also vary, with smaller companies typically having fewer directors than larger ones. Overall, the board of directors plays a crucial role in ensuring the long-term success and sustainability of a company by providing strategic guidance, overseeing management, and safeguarding the interests of the shareholders.