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The Functions of the Management Board

The functions of the management board are determined by the legal structure of an organization and bylaws. The specific powers that the board is granted could be outlined in the bylaws too. The majority of boards regardless of their specific definition, do not have unlimited power. They delegate decision-making to senior management or, in the case of non-profits, staff. The main function of the board is to assess whether the organization’s performance as a group is satisfactory.

In the case of large public companies directors are legally required to act as fiduciaries, representing the owners of shares/stocks and ensuring that the management does not make a mistake, squander assets, or violate the law. In a sense the board should be able to evaluate the CEO’s performance and decide on his or her compensation.

A lot of boards also carry out other tasks. They could be involved in risk and resilience sustainability corporate strategies technology and digitization and corporate strategy. To achieve this, boards must be able take on more responsibility and be more productive, as they must keep up with any new areas of concern that might arise.

However it is a risk if the board starts to interfere with the duties of management by taking decisions that can only be taken by the full board or by assuming management responsibilities, they risk upset a system that was specifically designed to ensure high-efficiency organizational success. In fact, such a structure may even increase turnover in the CEO and check my source other managers, because they lose faith in the ability of the board members to manage things when things go wrong.


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