Boards of directors have three formal responsibilities that each member is required to follow. Duty of Care Board members are legally bound to act in the best interests of the organization and make decisions that keep the company’s mission at the forefront. Duty of Loyalty – Each member must put aside their personal and professional interests when making decisions on behalf of the company. Duty of Obeyance Every member is legally obligation to ensure that the business adheres to all applicable laws and adheres to good governance standards.

Beyond these three official responsibilities, boards of directors are entrusted with a wider array of responsibilities, which vary according to the particular requirements of each organization. If your company is a publicly traded business, your board’s responsibilities will likely include overseeing the CEO, and making sure that the financial statements are accurate. However, if you’re an internally-run startup, your board might focus more on developing strategic goals and establishing the direction of your company.

The board’s responsibilities also include the maintenance of a balance in managing risk. Your board could be obligated to intervene in a situation that may harm the image of your company even if they are not legally or ethically accountable. Boards should also ensure their members are aware of the risks involved in serving on their boards and are equipped to manage them appropriately.

Ultimately, all board members have a crucial and unique role to play in assisting your business to succeed. It’s essential to be aware of your board’s responsibilities and how they relate to your organization’s strategic goals. Aprio’s Board Portal software for instance, can help you streamline your duties and organize meetings efficiently.

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