The legal structure of an organization and its bylaws define the responsibilities and powers of the management board. The specific powers of the board may be described in bylaws. Regardless of their exact terms however, the majority of boards don’t hold unlimited power; they delegate decision-making to senior managers (or, in the case of non-profits staff). The main function of a board is to determine if the decisions they make contribute to satisfactory results for the organization as an entire.
In the case of public companies the board is legally obligated to act as fiduciaries and represent shareholders of shares or stock in order to ensure that management is not in the process of wasting money, damaging assets, or breaking the law. In a sense the board is in a position to evaluate the CEO’s performance and make decisions regarding the compensation of the CEO.
Many boards are involved with various other roles as well. These might include managing resilience and risk, sustainability, corporate strategy, and technology and digitization. To accomplish this, boards need to be able to assume more responsibility and work harder in order to keep up with any new areas of concern that may arise.
However, if the board begins to interfere with the duties of management by making decisions that are only made by the full board or by taking on management responsibilities, they risk disrupting a structure that was specifically designed to achieve high-efficiency organization success. This structure could even cause a greater turnover of managers and CEOs as they lose faith in the board’s ability to handle situations discover this info here when they get wrong.