The responsibilities of the management board are determined by the legal structure of the organization and bylaws. The specific powers the board has can be defined in the bylaws as well. The majority of boards regardless of their specific wording, do not have unlimited power. They delegate decision making to senior management or, in the case non-profits and staff. The primary function of the board is to decide if the performance of the organization as a group is satisfactory.
In the case of public companies, the board is legally obliged to act as fiduciaries to represent the owners of shares and stock, ensuring that management is not in the process of wasting money, damaging assets, or infringing on the law. In a sense, the board must be in a position to evaluate the performance of the CEO and make decisions regarding his or her compensation.
Many boards also fulfill other functions. These could include resilience and risk, sustainability, corporate strategies as well as technology and digitization and corporate strategy. To achieve this, boards need to be able to take on more responsibility and push harder to be able to handle any new challenges that arise.
However when the board begins to encroach upon the responsibilities of management by taking decisions that could only be taken by the full board or taking on management responsibilities, they risk disrupting check my source a structure that was specifically designed to ensure high-efficiency organization success. This may cause a higher turnover of CEOs and managers because they lose confidence in the board’s ability in handling things when they go wrong.