A board of directors is an elected group of individuals who strategise and supervise the operations of an organisation. The management of a board can vary, but there are elements that are universal, including their roles and responsibilities. The board is where the buck stops: they are responsible for the successes and failings of an organisation’s project management. The board should be aware and knowledgeable of every level in the chain of command as well as the general operations of the organisation. The board members are responsible for the overall governance of the organisation and should take pride in the company’s success.
As mentioned, the management of the board depends on the organisation, or more precisely which model of governance the board chooses. There are 4 Models of Governance to choose from:
- Manager Focus - The CEO runs the organisation, with the board following their lead and existing essentially as a formality.
- Proactive Model - The CEO and the board are on the same page as equal partners and “speak with one voice”.
- Geographic Representation - Each board member is a representative for a specific geographic region or special interest group. This is usually seen with bigger boards.
- Community Representation - Similar to geographic representation, but instead a specific community. This is usually seen with school boards.
The governance model will impact the way an individual board member interacts with their roles and responsibilities. This is why it is important to join a board of directors that aligns with your governance style.
The majority of boards, alongside board members, will have a C-Suite consisting of a Corporate Secretary, a General Counsel, a Chief Financial Officer (CFO) or Treasurer, a Chairperson and a Chief Executive Officer (CEO). Below, you can see listed their roles and responsibilities.
What is the role of a Board Member?
Every member of a board is crucial for the management of the organisation. There is a legal requirement to have two independent non-executive directors for small organisations, and at least half of them be independent for larger ones. An independent board member is someone who does not have a material or financial investment in the company or employees. This ensures the impartiality necessary to run a board. The role of a board member is to oversee the general strategy and direction of the business, and to hire a CEO.
What are the responsibilities of a Board Member?
There are many things a board must be responsible for as a collective. They must:
- Agree on and carry out a governance model.
- Actively develop a strategic plan for the organisation and ensure its completion.
- Hire and oversee a CEO and any other executive board members.
- Ensure there is open and transparent communication between the board, the community, stakeholders and within the organisation itself, and as such maintain good relations with those aforementioned.
- Maintain fiscal responsibility, they are the ones making the financial decisions and must approve and monitor annual budgets.
- Assess both the work of the organisation, the employees and the board itself.
There are also personal responsibilities that each board member must undertake. They must:
- Understand the roles and responsibilities of a board member and act accordingly.
- Attend and be on time for the board meetings and actively participate in them.
- Be familiar with the law, both nationally and internationally, as well as the board’s own by-laws as they pertain to them.
- Acquaint themselves with the policies and machinations of the organisation.
- Put the interests of the organisation before their own, and avoid a conflict of interest at all costs.
- Ensure they stay up-to-date on both the affairs of the organisation, be that financial or legal, and current or local affairs that may impact the organisation.
- Support the consensus of the board once it has been reached.
- Respect the law and confidentiality requirements of the board and for the board members of that organisation.
- Bring their set expertise to the table in discussions and speak up when necessary.
What is the role of a Corporate Secretary?
Corporate Secretaries are regarded as the legal representatives of the organisation. It is preferable, although not essential, that they have a legal or accounting background. However, some organisations do require them to be lawyers. The Corporate Secretary’s role is to organise the proceedings of the meetings and ensure that they are recorded and reported accurately.
What are the responsibilities of a Corporate Secretary?
The Corporate Secretaries responsibilities are as follows:
- To set up the meeting, coordinating with all the board members to ensure that there are no conflicts, and they are given appropriate notice.
- Create the agenda, put together the board packs and make sure every member has them with adequate time.
- Record minutes during the meeting and present the formal minutes at the next meeting for approval.
- Onboard and provide training for any new members.
- Hold members accountable for their actions and ensure they stay up-to-date on tasks.
- Be aware of which and when reports need to be filed with regulatory bodies.
- Understand both the future, current and historic laws of the region and their impact.
- Inform the board of measures that could make their job easier, such as a board portal app, which could streamline processes and make accessing the board pack secure and instantaneous.
What is the role of a General Counsel?
The role of the General Counsel is sometimes performed by the Corporate Secretary in small organisations but in large ones it is important that these roles are separate. The General Counsel role MUST be filled by a lawyer. Their role is to ensure that the board’s business practice and strategic plans comply with the law. It is important that the General Counsel shows up to as many meetings as possible to ensure that no one is concerned by their presence. A board’s rumour-mill works fast! It is important that the board views their General Counsel as integral to the business process.
What are the responsibilities of a General Counsel?
The responsibilities of the General Counsel go further than those of the Corporate Secretary and are as follows:
- To know and understand the law of the industry the organisation is a part of and the law of the region.
- Point out and solve any potential issues that might arise and reflect negatively on the organisation’s reputation.
- Ensure they are up-to-date with the current developments within the organisation.
- Maintain a good working relationship with the CFO, Treasurer and Audit Committee.
- Hold the board accountable for their actions that threaten the legal compliance of the organisation.
What is the role of a CFO or Treasurer?
Firstly, what is the difference between a CFO and a Treasurer? In practice very little, it is pretty much only the name. A CFO tends to be the preferred term used in a large organisation, whereas smaller, and usually not-for-profit institutions prefer the term Treasurer. In the aforementioned larger organisations the Treasurer reports to the CFO, and is instead focused on the financial risks of the organisation. The role of the CFO or Treasurer is to account for and report on the budgets, expenditure and fiscal nature of the organisation. The Treasurer or CFO is the financial officer of the organisation. They tend to be from the financial profession, including accounting, and have managerial experience.
What are the responsibilities of a CFO or Treasurer?
The Responsibilities of a CFO and a Treasurer are the same on a board. In fact, many CFOs have experience as a Treasurer, which will have aided them in their promotion to CFO. The responsibilities are as follows:
- Bookkeeping; reconciling bank accounts and producing financial statements.
- Presenting their findings at board meetings.
- Ensure necessary financial documents, such as taxes, are filed on time. In a charity or not-for-profit, they would also be in charge of filing the necessary documents to maintain their tax-free status.
- Chairs the finance committee.
- Assists the CEO or prepares the annual budget and presents it to the board for approval.
- Reviews the annual audit.
- Is available for any of the board members' questions regarding the budget or auditing.
- Informs the board of any measures that would make their jobs easier, like a board portal with an auditing feature.
What is the role of a Chairperson?
A Chairperson oversees and leads the board meetings. They approve the agenda and call the votes. They also spearhead the search for a new CEO whenever this is necessary. They will be an experienced senior manager and understand the workings of the organisation. It is important that the Chairperson feels confident conducting the board meetings and will hold considerable influence over the discussions and decisions. The Chairperson is the spokesperson for the board and will be the one liaising with the CEO.
What is the role of a CEO?
The CEO supervises the senior management team and, in doing so, envisions the future of the company. They are the highest-level decision-maker and are responsible for the successes and failures of the company. They are the Executive of the organisation and have worked within the organisation and board to understand every level of project management. The CEO will be experienced in management, and understand the importance of good financial and legal administration. They are the spokesperson for the organisation and should feel confident in this. However, it is important to note that sometimes, larger organisations do have one individual perform the roles of both the Chair and CEO.
If you would like to learn more about this, please see our more detailed article on 'The roles and responsibilities of the CEO and Chairman.'
What are the responsibilities of a CEO and Chairperson?
In organisations where there is both a CEO and a Chairperson, their responsibilities will differ, for more information see our other article. When the CEO and Chairperson are one role, their duties as a board member are as follows:
- Chair board meetings, and ensures that board meetings run smoothly.
- Sets and abides with the agenda.
- Represents the organisation in a positive light and acts as the spokesperson when necessary.
- Signs the required financial and legal documents as the highest authority.
How can a Board Portal allow all these different roles to work together effortlessly?
A Board Portal ensures streamlined processes and reduces the risk of human error at every level of the board, from start to finish. Convene offers features that help with the before (creating and editing board packs securely until the last minute, arranging a time for the meeting conflict-free, ensuring only those intended see the board pack and an agenda available instantly), the during (following the page of the speaker, laser points, private and public note-taking features and action items) and the after (auditing, creating a meeting minutes, notifications about action items). All of these features aim to facilitate an easy, stress-free board meeting that aligns with the best security and ESG standards available.