how a board of directors works
the structure and powers of a board are determined by a company s articles of incorporation and its corporate bylaws bylaws can set the number of board members how the board is elected e g by a shareholder vote at an annual meeting and how often the board meets the board typically meets at regular intervals the board makes decisions as a fiduciary on behalf of the company and its shareholders broadly speaking it provides insight advice and leadership for important objectives such as protecting the interests of shareholders a board will promote efforts and activities that maximize the value that shareholders receive for their investment in addition to ensuring an efficiently run and profitable operation it makes certain that shareholders receive properly reported financial data and any other important information that could impact their holdings managing risk a board will establish policies that allow a company to identify evaluate and respond to financial security and legal risks as well as to mitigate actual loss facilitating ongoing risk monitoring is an essential responsibility of a board engaging with stakeholders a board will communicate with individuals and firms with vested interests in the company so that it understands those interests can address concerns pursue necessary changes in corporate behavior and make a positive impact that strengthens these relationships 