Corporate boards are a layer of supervision between the managers who run an organization and the shareholders. They are responsible for establishing policies, supervising the employees who manage the day-to-day operations and ensuring that the business operates in a legal manner and that its financial stability has been protected. They also act as an intermediary between the company and its stakeholders, including employees, clients vendors, suppliers/vendors community organizations and lenders.
To be able to carry out these responsibilities the board must possess a broad array of expertise and skills. Therefore, the majority of boards seek members with diverse backgrounds who are able to provide advice and support in areas that might be of concern. For example the board might want to include someone on its board who has expertise in international finance, or with a solid understanding of a particular regulatory agency.
In general the law requires that most boards have at least one officer. This ensures that the member of the board is aware of any issues that could be confronted by management and is able to respond accordingly.
As the public grows more interested in their business the perception of as an “old-boy” network is changing. This has resulted in more seats becoming accessible to general investors. However, it’s crucial to evaluate the potential advantages and risks of a particular job before applying.
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