Directors have a huge amount of responsibility within a business. Often a huge company will have a Board of Directors, which is a group of people selected to head the company or organization, often by the shareholders. Directors are the highest power of authority within a company or business & are usually lead by the Chief Executive Officer or CEO. As well as making decisions in regards to the direction of the business they may even be held liable if a business runs into financial difficulty & even get a Director Penalty notice.
- Governing the Board of Directors is responsible for governing the organization & establishing any policies & procedures of the company. They make decisions that affect the staff of the company, & importantly, also decisions that affect the shareholders. The board makes these decisions on a shareholder’s behalf, which is why the shareholders have a say in voting for the Board of Directors of a major company. The board needs to be selected cautiously because a comparatively small number of people is blamed for important decisions, which can have immense corporate & economic impact on the company.
- Chief Executive Officer the Chief Executive Officer, or CEO, is selected by the Board of Directors. It is usual for this decision to be made through a vote. One time the CEO is appointed the Board of Directors will support them & review their performance. The CEO is the face of the company & will find they may deal with the media & attend lots of meetings. The CEO is also the Chairman of the Board & will preside over meetings.
- Finances the Directors are responsible for ensuring that there are adequate financial resources to effectively run the company, pay employees & be definite continuous development within the company. They settle on the delegation of funds within the company, & as a group choose how the companies’ profits will be used. The companies’ annual budget is an element of their duties. A proportion of profits go to shareholders, but funds do return into a company to be definite continuous growth, & what areas this funds target is a choice that is left to the Board of Directors. The Board of Directors will also set their own salaries, which can be of the areas that can be controversial.
- Company performance The Directors are responsible for reporting to shareholders that performance of the company. Effectively the directors work for the shareholders, as they are all part owners of the company, no matter how small their percentage of possession. Often a huge percent of a company is owned by particular person or group of people, with only a smaller amount of the company being available to the general public. These types of decisions are left up to the Board of Directors.
- Legal duties Depending on the nature of the organization the legal duties of the Board of Directors will vary. Their legal duties will also depend on the jurisdiction the company operates within. A public company will be subjected to much more complex & thorough duties than a private company.