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Home Knowledge

Corporate Governance and the Board of Directors

The board is tasked with making important decisions, such as corporate officer appointments, executive compensation, and dividend policy.

India CSR by India CSR
October 27, 2022
in Knowledge
Reading Time: 3 mins read
Corporate Governance

Image Copyright: India CSR

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Directors are elected by shareholders or appointed by other board members, and they represent shareholders of the company.


A board of directors (BOD) is an elected group of individuals that represent shareholders. The board is a governing body that typically meets at regular intervals to set policies for corporate management and oversight.

Every public company must have a board of directors. Some private and non-profit organisations also have a board of directors. The board of directors is the primary direct stakeholder influencing corporate governance.

Directors are elected by shareholders or appointed by other board members, and they represent shareholders of the company. The board is tasked with making important decisions, such as corporate officer appointments, executive compensation, and dividend policy.

In some instances, board obligations stretch beyond financial optimisation, as and when shareholder resolutions call for certain social or environmental concerns to be prioritised.

Boards are often made up of inside and independent members. Insiders are major shareholders, founders, and executives. Independent directors do not share the ties of the insiders, but they are chosen because of their experience managing or directing other large companies.

Independents are considered helpful for governance because they dilute the concentration of power and help align shareholders’ interest with those of the insiders.

From the Book – ‘ Know Everything about Corporate Social Responsibility ‘

Available on Amazon.in

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