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Board of directors’ responsibilities

The roles of the board of directors include:

  1. Establish vision, mission and values
  2. Policy making
  3. Set strategy and structure
  4. Decision making
  5. Delegate to management

1) Establish vision, mission and values

  • Determining the company’s vision and mission to guide and set the pace for its current operations and future development
  • Determining the values to be promoted throughout the company
  • Determining and reviewing company goals
  • Determining company policies

2) Policy making

  • Making Policies that define, focus and differentiate responsibilities among the board, the management, and the staff
  • Reviewing and approving well-written policies that lead to more efficient board functioning
  • Developing a policy that covers the issue and leaving implementation of the policy to management

3) Set strategy and structure

  • Review and evaluate present & future opportunities, threats and risks in the external environment, current and future strengths, weaknesses and risks relating to the company
  • Determine strategic options, select the most appropriate ones, and decide the means to implement and support them
  • Determine the business strategies & plans that underpin the corporate strategy
    Ensure that the company’s organizational structure & capability are appropriate for implementing the chosen strategies

4) Decision making

  • Decision making involves making choices about the organization’s vision, mission, and strategies
  • Boards make decisions about issues that are strategic and significant
  • As decision makers, boards can also delegate non-governance types of decisions to others

5) Delegate to management

  • Delegate authority to management, and monitor & evaluate the implementation of policies, strategies and business plans
  • Determine monitoring criteria to be used by the board
  • Ensure that internal controls are effective
  • Communicate with senior management

The responsibilities of BOD include:

  • Approve the corporate strategy
  • Experiment business model and identify key performance measures
  • Identify risk areas and oversee risk management
  • Plan for and select new management executives
  • Design executive compensation packages
  • Ensure the integrity of financial statements
  • Approve major asset purchases
  • Protect company assets and reputation
  • Represent the interest of shareholders
  • Ensure the company complies with laws and codes
  • Free from conflicts that compromise judgment
  • Able to take positions in opposition to management
  • Represent companies view and account to the public
  • Leading the company properly
  • Establish appropriate internal control
  • Decide formal schedule of matters of the meeting
  • Determine the company`s mission and purpose

Types of decisions requiring board of directors’ approval

  • Cases that critically impact the organization’s vision, missions, and strategies
  • Plans that are strategic and significant
  • Cases, issues, problems, solutions that are strategic and significant
  • Financial matters that are strategic and significant

The role and responsibilities of the chairman

    The role and responsibilities of a Chairperson can be summarized under five areas:

  1. To provide leadership.
  2. To ensure the Management Committee functions properly.
  3. To ensure the organization is managed effectively.
  4. To provide support and supervision to the chief officer and senior team.
  5. To represent the organization as its figurehead.