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"The board of directors sets the strategy for the firm." Not really. The Board is there to oversee the company on behalf of the shareholders. Their primary jo
by jariel 6y ago
"The board of directors sets the strategy for the firm."
Not really.
The Board is there to oversee the company on behalf of the shareholders. Their primary job is oversight, they hire and fire the CEO, will be involved in recruitment for C-Level. They may or may not be involved with any kind of strategy. They will definitely be involved in financial governance issues such as fundraising, IPOs, major debt issuances.
They can be involved strategically by helping to form relationships, introductions, and in some cases providing guidance.
But the board doesn't make plans, do strategies etc. They're not very involved. Most board members don't do much at all.
- rswail 6y agoThat's because shareholders let them off the hook. The board represents the members (shareholders) of the company, they are responsible to them for the performance of their company, which reflects the investment in the equity. The CEO is an employee of the company. The power to set strategy may be delegated to him by the board, but the board is still responsible for it. Public companies have additional responsibilities of the board because they are also responsible to comply with the market's rules and government regulation (eg SEC regulations) that are stricter for public companies than private.