The board is responsible for all activities of the corporation |
The Board delegates Management Responsibilities to the CEO |
The Board's Role:
Governance and Oversight |
CEO's Role:
The Business Model & Management |
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- Build value for the owners
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- Represent the owners honestly and diligently
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- Represent the board honestly within the company.
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- Create the board's plan for each year and each meeting
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- Create the company's business plan
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- Review, approve, and monitor major strategies
Understand the business at an appropriate level
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- Oversee management' performance and be sure that the company has the right CEO for the job ahead.
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- Establish the company's culture
Organization and staffing
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- Be accountable for the composition and performance of the board and its committees
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- Market position and products/services
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- Set forth the CEO's goals for the future.
Approve budgets for achieving those goals
Set appropriate limits on the CEO's authority
Be accountable for the performance of the CEO
Monitor the company's progress carefully
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- Financial outlook and financing
Industry outlook and positioning
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- Legal and regulatory compliance oversight
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- Legal and regulatory compliance
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- Dealing with challenges, opportunities, threats.
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Do not take on any management roles.
If a director wants to influence management, it should be in the form of suggestions and advice to the CEO, never in the form of telling subordinate managers what to do or how. |
Do not take on any Board roles.
If a CEO wants to influence the board, it should be in the form of defining reality for them and communicating well. |