The responsibilities of the management board are determined by an organization’s legal structure and bylaws, and the specific powers that the board is granted could be specified in the bylaws too. Most boards, regardless of their exact form, do not possess unlimited power. They delegate decision making to senior managers or in the case of non-profits, staff. The primary function of the board is to assess whether the performance of the organization as a whole is satisfactory.
In the case of public companies, directors are legally required herbboardroom.com/the-difference-between-governance-and-management/ to act as fiduciaries, representing owners of shares/stocks, and ensuring that management doesn’t waste money, destroy assets, or violate the law. In a sense the board must be able to assess the CEO’s performance and make decisions regarding his or her compensation.
Many boards are involved with several other tasks as well. They could be involved in risk and resilience management sustainability, corporate strategy as well as technology and digitization. To do this, boards must be able to assume more responsibilities and be more active to stay on top of any new issues that arise.
If the board decides to take on management responsibilities whether through making decisions that should only be taken by a board of directors or by assuming the management functions, it could upset the carefully planned structure designed for efficiency-based success of an organization. In fact, such a structure may even lead to increased turnover among the management team, including the CEO, because they lose faith in the ability of the board to manage things when they go awry.