Definition

Responsibilities of Board of directors

The board of directors operates as the representatives of the firm’s stockholders. Elected by the stockholders,  the board has these major responsibilities:

  1.  To elect the company’s top officers, the foremost of whom is the CEO.                                  
  2.  To establish the compensation levels of the top officers, including their salaries and bonuses.
  3.  To determine the amount and timing of the dividends paid to stockholders.                               
  4.  To sets broad company policy on such matters as labor-management relations, product or service lines of business, and employee benefit package.                                                                
  5.  To set company objectives and to authorize managers to implement the long-term strategies that the top officers and the board have found agreeable.                                                                  
  6.  To mandate company compliance with legal and ethical dictates.

 

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