In corporate management, the board of directors is the ultimate team that is responsible for an entire firm. The board is responsible for determining goals, vision, and mission and weighs in on such things as strategic planning, mergers and acquisitions capital appropriations, operating budgets and the decisions regarding compensation. The board is accountable for the hiring and dismissal of the CEO and also for determining executive pay rates, bonus payments, employee stock options. Boards are often organized around committees that are focused on specific functions. For example the audit committee works with a company’s auditors while the compensation committee manages matters like the rate of pay and stock option grants.

Boards are the heart of an organization. They ensure that all homework is completed and that criteria are carefully analyzed prior to being presented to management for approval. Some presidents with a strong sense for discipline use the board as a means in enforcing quotas and other performance measures, and to measure the performances of their subordinate executives.

Directors rarely get involved in management policy decisions at a low level. decision-making, but they play a crucial role in establishing big policies for the company. They make decisions that have a major impact on the business like whether to shut down facilities, for example. They decide on where to put the company’s money and set long-term goals for growth, quality finance, people and quality. The board must also establish guidelines for its conduct and deal with legal issues such as conflicts, director independence as well as community benefits and the evaluation of the CEO.