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Board of Directors

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Board of Directors Responsibilities

The general public has pressured the government to demand accountability in the corporate world. The public worries that the inside board members may use their positions for personal gain. The outside board members are lacking enthusiasm and knowledge to do a decent job at monitoring top management. The role of the Board of Directors has become more organized and efficient, through laws and standards, than in the past. (Wheelen & Hunger, 2010)

Laws and standards are different for each country. The United States has a different approach. The U.S. has requirements for each state where the corporate charter is issued. There is an agreement through worldwide consensus that there should be key responsibilities for the board members. (Wheelen & Hunger, 2010) The following duties, listed in the order of importance, are: Setting corporate strategy, overall direction, mission or vision; hiring and firing the CEO and top management; controlling, monitoring, or supervising top management; reviewing and approving the use of resources, and caring for the shareholder interests. (Wheelen & Hunger, 2010, p. 45)

The National Association of Corporate Directors performed a survey with U.S. CEOs. The four most prominent issues the survey describes are as follows: Corporate performance, CEO Succession, strategic planning, and corporate governance. (Wheelen & Hunger, 2010, p. 46) The U.S. Corporation manages the laws of the state in which it is incorporated. The directors have to ensure management’s adherence to laws and regulations. Directors have to deal with security issues, insider trading, and conflict-of-interest. (Wheelen & Hunger, 2010)

The board attends to business with the due care law. If the corporations violate the due care law, they can be legally sued. Corporations purchase directors’ and officers’ liability insurance...

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