A board of directors is essentially a panel of people who are elected to represent

shareholders. A board of directors is a governing body that meets at regular intervals,

often monthly or quarterly, to provide strategic direction and oversight of an
organization. Every public company is legally required to install a board of directors;
nonprofit organizations and many private companies – while not required to – also
name a board of directors.

Governance can be defined as the framework of rules, relationships, systems, and

processes within an organisation which control how decisions are made. This is
essentially all the paperwork, including financial reports, audits, contracts,
employee/volunteer procedures, board records, or anything else that should be written
down to ensure it’s known by all members and stakeholders. 

Governance processes are built by the board in order to properly direct the organisation
and ensure that it’s operating as intended. Having proper governance in place will make
the next two board functions much easier to manage.

Strategic Direction
In just about every organisation, the board will be the group which decides, or at least
informs, the direction in which said organisation grows. When forming their boards,
founders/owners will make sure to find members who bring strong strategic experience
in a broad range of industries.
This allows the company to account for setbacks and use resources that they may not
have been able to otherwise, which can only ever be a good thing. Another big part of a
board’s strategic management is training, whether that’s of other management roles or
volunteers.

Keeping the organisation’s workers skilled is a major factor in future success, and boards
should always have a role in that process.

Accountability
As a group in charge of both the rules by which the organisation runs and the strategic
decisions it makes, a board of directors has a lot of weight on it’s collective shoulders.
This is something that every board member must be aware of.

The board is accountable for the results of the actions of the organisation they govern,
no matter whether those results are positive or negative. While often it’s the CEO or
founder of an organisation who takes the brunt of any negative press in the eyes of the
public, the whole board is always held internally accountable for these things.

On the flip side, bringing an organisation to great success brings great rewards for
those responsible - so accountability does go both ways

Basic structure of a Board of Directors

The structure, responsibilities, and powers given to a board of directors are determined
by the bylaws of a company or organization. The bylaws generally determine how many
board members there are, how the members are elected, and how frequently the board
members meet. There’s not a set number or structuring for a board of directors; it
depends largely on the company or organization, the industry in which the company or
organization operates, and the shareholders.

It’s widely agreed upon that the board needs to represent shareholder and
owner/management interests and that it’s usually a good idea for the board to include
both internal and external members. Accordingly, there is usually an internal director – a
member of the board that is invested in the daily workings of the company and manages
the interests of shareholders, officers, and employees – and an external director, who
represents the opinions and interests of those who function outside of the company.

The Chief Executive Officer (CEO) often also serves as chairman of the company’s

board of directors.

Role and responsibility

The board is responsible for creating the company’s bylaws, which are a set of core
policies that outline the company’s mission, values, vision and structure. On an as-
needed basis, the board creates and approves major policies for board governance.
Governance is defined as the decisions and actions of the people who run a
school, nation, city or business. An example of governance is the mayor's decision to
increase the police force in response to burglaries.
Boards should refrain from getting directly involved in daily matters. Without being
directly involved, boards must work closely with managers by providing guidelines.
Management should be sharing financial reports and the annual budget with the board.
Boards analyze financial reports and make many decisions, including decisions about
major acquisitions, disposals and capital expenditures.

The board recruits, appoints and monitors the appointment of new senior executives,
reviews their performance, and sets their pay and other benefits. Boards allow
managers to develop their operational strategies and boards review the strategies to
make sure they’re in keeping with the overall planning.

Boards of directors must take action when necessary for the good of the corporation,
especially with regard to unexpected crisis situations.

Management structures can take on an infinite number of formats depending on the size
and type of company. In all cases, management decisions support and implement the
board’s goals and values. Managers make routine operational decisions and handle all
of the administrative work that makes the operation tick. Administration interconnects
with nearly every department in the operation.

Managers also have a wide variety of duties and responsibilities that are
quite different from those of the board. While the board of directors creates company
policies, managers are responsible for enforcing company policy and holding
employees accountable for their actions.

Board of trustees don’t actively work in the organization or involve themselves in the
organization’s daily operations, whereas board of directors can make decisions for the
company including selecting and evaluating the organization’s leadership.

What does a board of directors do?

The board of directors have a collective responsibility to ensure the organization’s
successful operation. The top 5 responsibilities of a board of directors include:

1. Organizational planning and strategic direction

The board may be responsible for creating and reviewing the mission and purpose
statements that articulates the organization’s goals, means, and primary constituents
served. Boards must actively participate in an overall strategic planning process and
monitoring management decisions. 

2. Protect assets and provide financial oversight 

Similar to a board of trustees, boards of directors need to ensure that they’re protecting
the organization’s assets and managing them responsibly, including carrying out their
fiduciary responsibilities. For example, working with the chief financial officer to
establish a budget, ensure proper controls are in place for incoming and outgoing funds
and review the organization’s financial statements. 

3. Serve on committees or working groups

Board members should serve on committees or task forces and offer to take on special
assignments, as this is where the bulk of board work gets done. Example committees
include governance, finance, executive and audit committees. Boards can also create
ad hoc committees or working groups to accomplish specific goals or tasks. 

4. Select, support and review performance of the chief executive

The board is responsible for vetting and selecting a qualified candidate for the CEO or
executive director to run the day-to-day management activities of the organization.
Once appointed, the board works collaboratively with the chief executive to meet the
organization’s short and long-term plans. On an annual basis, the board of directors is
also responsible for evaluating the performance of the CEO. 

5. Board member recruitment and board performance evaluation

The board of directors is responsible for recruiting, nominating and appointing new
board members with the right mix of skills, knowledge and experience. They will also
evaluate their performance on an annual basis to identify gaps and form a strategic
plan.

COMMITTEE
A committee can be one of the most productive tools that an association has to work
with.  Whether one is chairing a committee or is a committee member, her or she faces
the challenge of getting involved in the work the committee was formed to accomplish.
A committee member's contribution and participation on the committee will determine its
success or failure.  If committee members participate, get involved, and encourage
others on the committee to do so, the committee will be successful.  Enthusiasm is
contagious.
The findings of a committee have a direct impact on the decisions made by the officers
and the board of directors of the association.  The energy a committee member puts
into your work on the committee has a direct influence on the direction your association
takes.
Committee members are tasked to:

 should know who the committee chairman is.

 Should know what the specific responsibilities of committee are.
  establish only realistic attainable goals.
Are asked to :
 Study the meeting agenda carefully before coming to the committee meeting and
ask for clarification if any items are unclear.  Review the supporting material.
Effective committees don't just happen.  They are a combination of the right
individuals, a mission, good leadership, [and] good staff work.