The Functions of the Management Board
The management board performs a variety of functions, including setting strategy, managing finances building relationships with the local community, and establishing ethical standards. Boards choose a CEO and monitor their progress. they decide the direction of an organization through the development of the vision, mission and strategic goals; develop relationships with the community; establish management practices for quality and compliance, as well as governance and take action to address any organizational changes that are triggered due to changing circumstances or regulatory pressures.
Boards are legally accountable as fiduciaries, whose job is to represent shareholders and investors. They set corporate rules, make guidelines for dividend payouts and compensation, and appoint and dismiss upper management. They also maintain strong communications with management and are the ones who represent management to the organization. The Chair of the Board, who is usually elected by the board members and is the head of the whole board. They are often non-executive directors (NEDs) who serve as the liaison between the chief executive officer and the board.
The biggest function of the board is to function as a steward for the organization. Some boards however, cross the line and try to manage the organization on their own, rather than ensuring that the activities are in line with the mission of the organization. Boards need to balance their oversight role with their responsibilities to ensure organizational success. The most efficient way to accomplish this is through the use of committees. Audit, compensation, and nominating committees, as an example, have become popular methods of looking at complex issues. These committees are required to report back to the full board on their findings.
