Role-of-board-of-directors.docx

ROLE OF BOARD OF DIRECTORS Research says that the corporate board of directors assists in corporate governance by supervising executive management and makes strategic decisions for the company. When we say corporate governance, it is the system of rules, practices and processes by which a company is directed and controlled. Strategic management, on the other hand, involves the formulation and implementation of the major goals and initiatives taken by an organization's top management on behalf of owners, based on consideration of resources and an assessment of the internal and external environments in which the organization operates. Colliding corporate governance with strategic management, it refers to the set of internal rules and policies that determine how a company is directed. Corporate governance decides, for example, which h strategic decisions must be decided by the board of directors or shareholders. It is also concerned with the functioning of Board of Directors (BODs) – its structure, styles, process, their relationships, roles and activities. Thus, the Board of Directors (BOD’s) is considered as a crucial part of the corporate governance. The Board of Directors (BOD) is the governing body for a company. All major decisions needs to be ratified by the board – may it be in acquiring another entity or in firing and hiring another CEO. On all matters of strategic performance, the board needs to be engaged, involved and supportive. Corporate boards have many duties and responsibilities in which its primary roles are: to establish policies, to make significant and strategic decisions, and to oversee the organization's activity. The roles of the board of directors include:1) Establish vision, mission and values 2) Policy making 3) Set strategy and structure 4) Decision making 5) Delegate to management 6.) Monitor and control 1. Establish vision, mission and values: The BOD Determines the company's vision and mission to guide and set the pace for its current operations and future development. They Determine the values to be promoted throughout the company and determine and review company policies and goals. 2. Policy making:

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Instead of having the same matter or very similar matters on the agenda repeatedly, the board can develop a policy that covers the issue and leave implementation of the policy to management regarding different responsibilities among the board, management, and staff.

3. Set strategy and structure:  The board of directors view and evaluate present and future opportunities, threats and risks in the external environment and current and future strengths, weaknesses and risks relating to the company. They Determine strategic options, select those to be pursued, and decide the means to implement and support them.  Determine the business strategies and plans that underpin the corporate strategy. They also ensure that the company's organisational structure and capability are appropriate for implementing the chosen strategies. 4. Decision making: Decision making involves making choices about the organization's vision, mission, and strategies. The Boards make decisions about issues that are strategic and significant, such as whether to enter an affiliation agreement with another organization. As decision makers, boards can also delegate non governance types of decisions to others—and would be wise to do so. 5. Delegate to management:  BOD’s delegate authority to management, and monitor and evaluate the implementation of policies, strategies and business plans. They determine the monitoring criteria to be used by the board to ensure that internal controls are effective. The results are then communicated with senior management. 6. Monitor and control function. The board is in charge of the auditing process and hires the auditor. It is in charge of making sure the audit is done in a timely manner each year. MEMBERS: Cabanlit, Ephraim Cagulada, Feranie Jane Careras, Karen Jeanette Casia, Kristinne Jeanne Malalis, Rizalyn