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The principles of management for boards define the manner in which a board conducts its business. They regulate the relationship between the company’s Board of Directors and how it oversees corporate matters that cannot be delegated by lower-ranking officials.
The board is accountable for many things that can’t be accounted for in a company’s annual report. For example, the board must recruit and appoint a CEO, make sure that the company acts in its best interest, and relay concerns to shareholders. The board’s job is to assess the capacity of the company and potential.
Many boards conduct annual reviews to improve their performance. These may be focused on the board as a whole, the board’s committees, directors’ individual directors, or even the chair.
A common practice is to keep a record of each meetings. This allows the board to comprehend how its decisions impact others including investors and employees. A well-written minute can be a valuable piece evidence in legal proceedings.
The board must also be able to assess and determine risk. This includes identifying the weaknesses of the company and devising strategies to address or eliminate them. This includes evaluating the impact of changes that could be enacted on the community and other stakeholders. The board should also be informed of any major developments as soon as possible. The board, for example is required to be aware when CEO compensation exceeds the company’s overall performance and average worker salaries.
