A board of directors is a body that is responsible for an entity regardless of whether it is publicly traded (public company) privately owned, privately owned or only open to family members (family company), or tax-exempt (a non-profit corporation). The power, duties, and responsibilities of the board are heavily governed by the regulations of the government and the constitution and by-laws for the organization.
Most presidents and external directors agree that a board’s role is advisory, not decision-making. Management runs the business and the board provides advice and direction to management. Outside directors are recruited because of their expertise in specific fields of business and provide an overview of the business which may not be accessible to the management. Many presidents are aware of the value of the advice provided by their boards, both in and outside of formal meetings. They carefully choose new directors in accordance with their desirable qualities and areas of expertise.
A fundamental function of a board is the questioning of management, particularly when there are serious issues in the company or economy. However, my research revealed that, despite the fact that many presidents are known to seek out thoughtful questions from directors however, they rarely permit them to take place during board meetings. This is especially true when they feel that they are under attack from subordinates who are on the board as well as in attendance at the meeting.
