A board of directors, also referred to as „BoD“ or a „board“ is a group of individuals chosen by shareholders to represent the interests of that company. Board members create policies for the overall management and oversight of a company, while protecting the assets of shareholders. The board acts as a liaison between the company and its shareholders and is responsible for ensuring that the company operates legally and in a responsible manner.

This board of directors in corporate management involves setting the tone for all employees at the top with the foundational rules of ethical conduct. It approves a corporate strategy that is intended to build long-term sustainability and value, and chooses and supervises the CEO and top management for the operation of the company’s operations, including assigning capital and managing risk.

The board also examines the financial reports and ensures compliance with laws and regulations. It also communicates with all stakeholders, like employees suppliers, customers and employees, and the local community, to be aware of their concerns.

A company’s board should have a mix of insiders and outside members who are a mix of age, gender and ethnicity. Companies with a wider diversity of board members tend to do better financially. This is because an inclusive board is more likely to possess a range of opinions and perspectives that lead to better decisions.