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What Are the Functions of the Board of Directors?

A board of directors is initially elected by the incorporator of a corporation or nonprofit organization. In subsequent years the members of the board are elected by shareholders at an annual meeting. The board of directors acts as a group with no single individual forcing an opinion or direction upon the corporation as a whole.

    Chief Executive

  1. A corporation's board of directors is responsible for the appointment, evaluation and, if required, eventual termination of the position of Chief Executive.
  2. Continuity

  3. The business affairs of a corporation are managed by the Board of Directors, which provides continuity for the corporation in the development of the services and products provided.
  4. Objectives

  5. In nonprofit organizations the Board of Directors develops policies that fit into the mission statement and values decided upon by the nonprofit. In the for-profit sector the broad policies and objectives of the corporation are decided upon by the Board of Directors in cooperation with the Chief Executive and the company's employees.
  6. Accountability

  7. The Board of Directors is accountable for the quality of the product or service supplied by the corporation. The Board of Directors is also responsible for the expenditure of corporation funds.
  8. Resources

  9. The Board of Directors is responsible for ensuring the finances available to a corporation are adequate to cover company expenses.
  10. Finances

  11. The Board of Directors carries certain fiscal responsibilities including overseeing and accepting budgets. The Board of Directors is also responsible for financial policies regarding contracts between the corporation and the public.

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