In the United States, how much control should be given to the board of directors
ID: 2734928 • Letter: I
Question
In the United States, how much control should be given to the board of directors of a corporate entity? Are these the same rules in other areas of the world? Financially, the board of directors are responsible for the corporation--or are they?References In the United States, how much control should be given to the board of directors of a corporate entity? Are these the same rules in other areas of the world? Financially, the board of directors are responsible for the corporation--or are they?
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References
Explanation / Answer
The Board of Directors(BoD) are the representatives of the shareholders who give policy direction to the company and ensures that the company is working in the best interest of the shareholders. In addition to such Directors , there can be some representatives from Banks who have extended loans to the company whose presence is needed to ensure that the fund is properly utilized and bank gets back its money as per the agreement. Besides these Directors , there can be a number of independent directors in the BoD who have expert knowledge of relevance to the company. They add value by providing new ideas and innovative solutions to various problems.
One of the main responsibilities of board members is to maintain financial accountability of their organization. Board members act as trustees of the organization’s assets and must exercise due diligence to oversee that the organization is well-managed and that its financial situation remains sound.
Across the globe , BoD work in the spirit described above.
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