Board of Directors - Revision history

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← Older revision		Revision as of 23:07, 9 February 2023
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	Directors attend board meetings, evaluate management performance, tend to major decisions (such as making acquisitions or selling the company), declare dividends, create stock-option policies (including approving grants to key managers), and establish executive compensation packages. Boards of directors often have several committees dedicated to specific decision-making processes. For example, the compensation committee constructs the executive compensation packages and brings them before the full board for a vote; the audit committee evaluates and hires the company's auditors after bringing its research and judgment before the full board, and the finance committee evaluates the merger bids or potential sources of capital. Directors are elected by the shareholders usually once a year and usually at the annual shareholders' meeting. In most cases, directors have staggered terms, meaning that they will not all be up for re-election in the same year. Quite often, the CEO of the company is on the board, and the CFO or even the COO might hold board seats. Most shareholders agree that management's presence on the board brings detailed expertise to the board's decision-making processes, but this can also create conflicts between acting in management's best interests and the shareholders' best interests. Independent directors (also called non-executive directors) are directors who don't work for the company. Non-executive directors are compensated with cash for their directorships; quite often they also receive stock options or stock grants. The Sarbanes-Oxley Act of 2002 introduced new standards for board conduct to ensure that directors are aware of and accountable for the financial condition of the companies they manage. These new standards include holding the board responsible for the integrity of the company's internal controls, but higher accountability is even more evident in the act's requirement that the board of directors of most public companies has an audit committee. This committee must appoint, inspect, regulate, and control the actions of the company's auditing firm. The auditors in turn report directly to the audit committee. Committee members cannot be employees of the company, and companies are required to disclose which members meet the definition of "financial expert." The audit committee must be prepared to address complaints and confidential or anonymous submissions about the company's accounting practices. In most cases, directors are covered by directors' and officers' insurance ("D&O insurance") in order to protect the company against judgments caused by board misconduct.		Directors attend board meetings, evaluate management performance, tend to major decisions (such as making acquisitions or selling the company), declare dividends, create stock-option policies (including approving grants to key managers), and establish executive compensation packages. Boards of directors often have several committees dedicated to specific decision-making processes. For example, the compensation committee constructs the executive compensation packages and brings them before the full board for a vote; the audit committee evaluates and hires the company's auditors after bringing its research and judgment before the full board, and the finance committee evaluates the merger bids or potential sources of capital. Directors are elected by the shareholders usually once a year and usually at the annual shareholders' meeting. In most cases, directors have staggered terms, meaning that they will not all be up for re-election in the same year. Quite often, the CEO of the company is on the board, and the CFO or even the COO might hold board seats. Most shareholders agree that management's presence on the board brings detailed expertise to the board's decision-making processes, but this can also create conflicts between acting in management's best interests and the shareholders' best interests. Independent directors (also called non-executive directors) are directors who don't work for the company. Non-executive directors are compensated with cash for their directorships; quite often they also receive stock options or stock grants. The Sarbanes-Oxley Act of 2002 introduced new standards for board conduct to ensure that directors are aware of and accountable for the financial condition of the companies they manage. These new standards include holding the board responsible for the integrity of the company's internal controls, but higher accountability is even more evident in the act's requirement that the board of directors of most public companies has an audit committee. This committee must appoint, inspect, regulate, and control the actions of the company's auditing firm. The auditors in turn report directly to the audit committee. Committee members cannot be employees of the company, and companies are required to disclose which members meet the definition of "financial expert." The audit committee must be prepared to address complaints and confidential or anonymous submissions about the company's accounting practices. In most cases, directors are covered by directors' and officers' insurance ("D&O insurance") in order to protect the company against judgments caused by board misconduct.

−	The purpose of the board of directors is to make sure management is acting in the best interests of the shareholders. This is why the board of directors lays at the heart of the notion of Corporate Governance -- it has a fiduciary duty to the shareholders, and only to the shareholders. This can be difficult, especially when the vast majority of information that boards receive about corporate performance comes from management. Board members also aren't "there" every day and thus generally don't know their companies, as well as the managers, do. In addition, there is often pressure to agree with executive directors given their day-to-day knowledge of the company. But ultimately, if the shareholders don't think the board is representing their interests well, the shareholders simply elect different directors.	+	The purpose of the board of directors is to make sure management is acting in the best interests of the shareholders. This is why the board of directors lays at the heart of the notion of [[Corporate Governance]] -- it has a fiduciary duty to the shareholders, and only to the shareholders. This can be difficult, especially when the vast majority of information that boards receive about corporate performance comes from management. Board members also aren't "there" every day and thus generally don't know their companies, as well as the managers, do. In addition, there is often pressure to agree with executive directors given their day-to-day knowledge of the company. But ultimately, if the shareholders don't think the board is representing their interests well, the shareholders simply elect different directors.

← Older revision		Revision as of 13:20, 4 January 2023
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	===See Also===		===See Also===
	*[[Staggered Board of Directors]]		*[[Staggered Board of Directors]]
−	*[[E-Governance]]
−	*[[IT Governance\|Corporate Governance of Information Technology]]
−	*[[Information Governance (IG)]]
−	*[[Information Security Governance]]
−	*[[Social Media Governance]]
−	*[[Data Governance]]
−	*[[Compliance]]
−	*[[Risk Management]]
−	*[[Risk IT Framework]]
−	*[[Enterprise Risk Management (ERM)]]

@@ Line 1: / Line 1: @@
-A Board of Directors is a recognized group of people who jointly oversee the activities of an [[organization]], which can be either a for-[[profit]] [[business]], a nonprofit organization, or a government agency. Such a board's powers, duties, and responsibilities are determined by government regulations (including the jurisdiction's corporation law) and the organization's own constitution and bylaws. These authorities may specify the number of members of the board, how they are to be chosen, and how often they are to meet.<ref>[https://en.wikipedia.org/wiki/Board_of_directors What is a Board of Directors?-Wikipedia]</ref>
+A Board of Directors is a recognized group of people who jointly oversee the activities of an organization, which can be either a for-profit business, a nonprofit organization, or a government agency. Such a board's powers, duties, and responsibilities are determined by government regulations (including the jurisdiction's corporation law) and the organization's own constitution and bylaws. These authorities may specify the number of members of the board, how they are to be chosen, and how often they are to meet.<ref>[https://en.wikipedia.org/wiki/Board_of_directors What is a Board of Directors?-Wikipedia]</ref>
 '''Board of Directors - How it Works and Why it Matters'''<ref>[http://www.investinganswers.com/financial-dictionary/businesses-corporations/board-directors-4871 Board of Directors - How it Works and Why it Matters-Investing Answers]</ref><br />
-Directors attend board meetings, evaluate [[management]] performance, tend to major decisions (such as making acquisitions or selling the company), declare dividends, create stock-option policies (including approving grants to key managers), and establish executive [[compensation]] packages. Boards of directors often have several committees dedicated to specific decision-making processes. For example, the compensation committee constructs the executive compensation packages and brings them before the full board for a vote; the audit committee evaluates and hires the company's auditors after bringing its research and judgment before the full board, and the finance committee evaluates the merger bids or potential sources of capital. Directors are elected by the shareholders usually once a year and usually at the annual shareholders' meeting. In most cases, directors have staggered terms, meaning that they will not all be up for re-election in the same year. Quite often, the CEO of the company is on the board, and the CFO or even the COO might hold board seats. Most shareholders agree that management's presence on the board brings detailed expertise to the board's decision-making processes, but this can also create conflicts between acting in management's best interests and the shareholders' best interests. Independent directors (also called non-executive directors) are directors who don't work for the company. Non-executive directors are compensated with cash for their directorships; quite often they also receive stock options or stock grants. The Sarbanes-Oxley Act of 2002 introduced new standards for board conduct to ensure that directors are aware of and accountable for the financial condition of the companies they manage. These new standards include holding the board responsible for the integrity of the company's internal controls, but higher accountability is even more evident in the act's requirement that the board of directors of most public companies has an audit committee. This committee must appoint, inspect, regulate, and control the actions of the company's auditing firm. The auditors in turn report directly to the audit committee. Committee members cannot be employees of the company, and companies are required to disclose which members meet the definition of "financial expert." The audit committee must be prepared to address complaints and confidential or anonymous submissions about the company's accounting practices. In most cases, directors are covered by directors' and officers' insurance ("D&O insurance") in order to protect the company against judgments caused by board misconduct.
+Directors attend board meetings, evaluate management performance, tend to major decisions (such as making acquisitions or selling the company), declare dividends, create stock-option policies (including approving grants to key managers), and establish executive compensation packages. Boards of directors often have several committees dedicated to specific decision-making processes. For example, the compensation committee constructs the executive compensation packages and brings them before the full board for a vote; the audit committee evaluates and hires the company's auditors after bringing its research and judgment before the full board, and the finance committee evaluates the merger bids or potential sources of capital. Directors are elected by the shareholders usually once a year and usually at the annual shareholders' meeting. In most cases, directors have staggered terms, meaning that they will not all be up for re-election in the same year. Quite often, the CEO of the company is on the board, and the CFO or even the COO might hold board seats. Most shareholders agree that management's presence on the board brings detailed expertise to the board's decision-making processes, but this can also create conflicts between acting in management's best interests and the shareholders' best interests. Independent directors (also called non-executive directors) are directors who don't work for the company. Non-executive directors are compensated with cash for their directorships; quite often they also receive stock options or stock grants. The Sarbanes-Oxley Act of 2002 introduced new standards for board conduct to ensure that directors are aware of and accountable for the financial condition of the companies they manage. These new standards include holding the board responsible for the integrity of the company's internal controls, but higher accountability is even more evident in the act's requirement that the board of directors of most public companies has an audit committee. This committee must appoint, inspect, regulate, and control the actions of the company's auditing firm. The auditors in turn report directly to the audit committee. Committee members cannot be employees of the company, and companies are required to disclose which members meet the definition of "financial expert." The audit committee must be prepared to address complaints and confidential or anonymous submissions about the company's accounting practices. In most cases, directors are covered by directors' and officers' insurance ("D&O insurance") in order to protect the company against judgments caused by board misconduct.
-The purpose of the board of directors is to make sure management is acting in the best interests of the shareholders. This is why the board of directors lays at the heart of the notion of [[Corporate Governance]] -- it has a fiduciary duty to the shareholders, and only to the shareholders. This can be difficult, especially when the vast majority of information that boards receive about corporate performance comes from management. Board members also aren't "there" every day and thus generally don't know their companies, as well as the managers, do. In addition, there is often pressure to agree with executive directors given their day-to-day knowledge of the company. But ultimately, if the shareholders don't think the board is representing their interests well, the shareholders simply elect different directors.
+The purpose of the board of directors is to make sure management is acting in the best interests of the shareholders. This is why the board of directors lays at the heart of the notion of Corporate Governance -- it has a fiduciary duty to the shareholders, and only to the shareholders. This can be difficult, especially when the vast majority of information that boards receive about corporate performance comes from management. Board members also aren't "there" every day and thus generally don't know their companies, as well as the managers, do. In addition, there is often pressure to agree with executive directors given their day-to-day knowledge of the company. But ultimately, if the shareholders don't think the board is representing their interests well, the shareholders simply elect different directors.
@@ Line 25: / Line 25: @@
 *Managing Boards/Executive Boards: A group of people who actually manage the operations as a collective group (instead of a single CEO). They are not the same as a governing board but may work under one. They make the day-to-day decisions of what gets done and the long-term decisions about how to organize operations to achieve the organization’s purpose.
 *Fund Raising Boards: The board is often only a “board” in name alone. Its real purpose is to use its members’ connections and influence to solicit resources for the organization.
-*[[Policy]] Board: This is actually more about how the board does its work than a type of board but since you often hear the name we wanted to describe it. A policy board is any board, typically a governing board, that directs operations by developing policies that guide operational decisions rather than making the actual yes or no decision themselves. The CEO is then expected to carry out all policies.
+*Policy Board: This is actually more about how the board does its work than a type of board but since you often hear the name we wanted to describe it. A policy board is any board, typically a governing board, that directs operations by developing policies that guide operational decisions rather than making the actual yes or no decision themselves. The CEO is then expected to carry out all policies.
@@ Line 34: / Line 34: @@
 Involvement in the day-to-day management of the company or being in the full-time salaried employment of the company (or its subsidiary) or both, defines the director as an executive. An executive director, through his or her privileged position, has an intimate knowledge of the workings of the company. There can, therefore, be an imbalance in the amount and quality of information regarding the company’s affairs possessed by an executive and non-executive director. Executive directors carry an added responsibility. They are entrusted with ensuring that the information laid before the board by management is an accurate reflection of their understanding of the affairs of the company. Executive directors need to strike a balance between their management of the company, their fiduciary duties, and the concomitant independent state of mind required when serving on the board. The executive director needs to ask himself “Is this right for the company?”, and not “Is this right for the management of the company?”
 *Non-Executive Director
-The non-executive director plays an important role in providing objective judgment independent of management on issues facing the company. Not being involved in the management of the company defines the director as non-executive. Non-executive directors are independent of management on all issues including [[strategy]], performance, sustainability, resources, transformation, diversity, employment equity, standards of conduct, and evaluation of performance. The non-executive directors should meet from time to time without the executive directors to consider the performance and actions of executive management. An individual in full-time employment of the holding company is also considered a non-executive director of a subsidiary company unless the individual, by conduct or executive authority, is involved in the day-to-day management of the subsidiary.
+The non-executive director plays an important role in providing objective judgment independent of management on issues facing the company. Not being involved in the management of the company defines the director as non-executive. Non-executive directors are independent of management on all issues including strategy, performance, sustainability, resources, transformation, diversity, employment equity, standards of conduct, and evaluation of performance. The non-executive directors should meet from time to time without the executive directors to consider the performance and actions of executive management. An individual in full-time employment of the holding company is also considered a non-executive director of a subsidiary company unless the individual, by conduct or executive authority, is involved in the day-to-day management of the subsidiary.
 *Independent Director
 In essence, an independent director is a non-executive director who:
@@ Line 60: / Line 60: @@
 '''Board Governance Models'''<ref>[https://www.boardeffect.com/blog/board-governance-models-a-comprehensive-list/ Board Governance Models:A Comprehensive List  -Board Effect]</ref><br />
 Governance is an amalgamation of policies, systems, and structures, along with a strategic, operational framework that aligns organizational
-Nonprofit boards keep the [[Business Mission|organization’s mission]] at the forefront when directing the affairs of the organization. Incoming funds are used to support the organization’s work. Most board members for nonprofit organizations serve on the board because of their passion and commitment to a cause. While serving on a nonprofit board carries a certain level of honor and prestige, board members need to take an active approach to overseeing the organization to prevent problems and legal issues. Nonprofit boards hold responsibility for fiduciary matters, as well as matters that have been delegated to others. There are five common board models for nonprofit boards:<br />
+Nonprofit boards keep the organization’s mission at the forefront when directing the affairs of the organization. Incoming funds are used to support the organization’s work. Most board members for nonprofit organizations serve on the board because of their passion and commitment to a cause. While serving on a nonprofit board carries a certain level of honor and prestige, board members need to take an active approach to overseeing the organization to prevent problems and legal issues. Nonprofit boards hold responsibility for fiduciary matters, as well as matters that have been delegated to others. There are five common board models for nonprofit boards:<br />
 . Advisory Board Governance Model: A CEO who founds an organization will soon find that he needs help in running the organization. An advisory board serves as the primary resource for the CEO to turn to for help and advice. Members of an advisory board are trusted advisors who offer professional skills and talents at no cost to the organization. Advisory boards may also be formed in addition to an organization’s board to help and advise the board, as a whole. Advisory board members typically have established expertise or credentials in the nonprofit’s field. An organization that is visibly connected to an advisory board’s name, can increase the organization’s credibility, fundraising efforts, or public relations efforts.<br />
 . Patron Governance Model: The Patron Model is similar to the Advisory Board Model. The main difference between the two models is that the primary purpose of the board members under the Patron Model is to perform duties related to fundraising. Patron Model boards are typically comprised of board members who have personal wealth or influence within the field. The primary role of board members under the Patron Model is to contribute their own funds to the organization and to use their network to gain outside contributions for the organization. Under this model, the board members have less influence over the CEO or organization’s board than in the Advisory Board Model.<br />

← Older revision		Revision as of 22:11, 2 December 2022
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	Directors attend board meetings, evaluate [[management]] performance, tend to major decisions (such as making acquisitions or selling the company), declare dividends, create stock-option policies (including approving grants to key managers), and establish executive [[compensation]] packages. Boards of directors often have several committees dedicated to specific decision-making processes. For example, the compensation committee constructs the executive compensation packages and brings them before the full board for a vote; the audit committee evaluates and hires the company's auditors after bringing its research and judgment before the full board, and the finance committee evaluates the merger bids or potential sources of capital. Directors are elected by the shareholders usually once a year and usually at the annual shareholders' meeting. In most cases, directors have staggered terms, meaning that they will not all be up for re-election in the same year. Quite often, the CEO of the company is on the board, and the CFO or even the COO might hold board seats. Most shareholders agree that management's presence on the board brings detailed expertise to the board's decision-making processes, but this can also create conflicts between acting in management's best interests and the shareholders' best interests. Independent directors (also called non-executive directors) are directors who don't work for the company. Non-executive directors are compensated with cash for their directorships; quite often they also receive stock options or stock grants. The Sarbanes-Oxley Act of 2002 introduced new standards for board conduct to ensure that directors are aware of and accountable for the financial condition of the companies they manage. These new standards include holding the board responsible for the integrity of the company's internal controls, but higher accountability is even more evident in the act's requirement that the board of directors of most public companies has an audit committee. This committee must appoint, inspect, regulate, and control the actions of the company's auditing firm. The auditors in turn report directly to the audit committee. Committee members cannot be employees of the company, and companies are required to disclose which members meet the definition of "financial expert." The audit committee must be prepared to address complaints and confidential or anonymous submissions about the company's accounting practices. In most cases, directors are covered by directors' and officers' insurance ("D&O insurance") in order to protect the company against judgments caused by board misconduct.		Directors attend board meetings, evaluate [[management]] performance, tend to major decisions (such as making acquisitions or selling the company), declare dividends, create stock-option policies (including approving grants to key managers), and establish executive [[compensation]] packages. Boards of directors often have several committees dedicated to specific decision-making processes. For example, the compensation committee constructs the executive compensation packages and brings them before the full board for a vote; the audit committee evaluates and hires the company's auditors after bringing its research and judgment before the full board, and the finance committee evaluates the merger bids or potential sources of capital. Directors are elected by the shareholders usually once a year and usually at the annual shareholders' meeting. In most cases, directors have staggered terms, meaning that they will not all be up for re-election in the same year. Quite often, the CEO of the company is on the board, and the CFO or even the COO might hold board seats. Most shareholders agree that management's presence on the board brings detailed expertise to the board's decision-making processes, but this can also create conflicts between acting in management's best interests and the shareholders' best interests. Independent directors (also called non-executive directors) are directors who don't work for the company. Non-executive directors are compensated with cash for their directorships; quite often they also receive stock options or stock grants. The Sarbanes-Oxley Act of 2002 introduced new standards for board conduct to ensure that directors are aware of and accountable for the financial condition of the companies they manage. These new standards include holding the board responsible for the integrity of the company's internal controls, but higher accountability is even more evident in the act's requirement that the board of directors of most public companies has an audit committee. This committee must appoint, inspect, regulate, and control the actions of the company's auditing firm. The auditors in turn report directly to the audit committee. Committee members cannot be employees of the company, and companies are required to disclose which members meet the definition of "financial expert." The audit committee must be prepared to address complaints and confidential or anonymous submissions about the company's accounting practices. In most cases, directors are covered by directors' and officers' insurance ("D&O insurance") in order to protect the company against judgments caused by board misconduct.

−	The purpose of the board of directors is to make sure management is acting in the best interests of the shareholders. This is why the board of directors lays at the heart of the notion of [[~~corporate governance~~]] -- it has a fiduciary duty to the shareholders, and only to the shareholders. This can be difficult, especially when the vast majority of information that boards receive about corporate performance comes from management. Board members also aren't "there" every day and thus generally don't know their companies, as well as the managers, do. In addition, there is often pressure to agree with executive directors given their day-to-day knowledge of the company. But ultimately, if the shareholders don't think the board is representing their interests well, the shareholders simply elect different directors.	+	The purpose of the board of directors is to make sure management is acting in the best interests of the shareholders. This is why the board of directors lays at the heart of the notion of [[Corporate Governance]] -- it has a fiduciary duty to the shareholders, and only to the shareholders. This can be difficult, especially when the vast majority of information that boards receive about corporate performance comes from management. Board members also aren't "there" every day and thus generally don't know their companies, as well as the managers, do. In addition, there is often pressure to agree with executive directors given their day-to-day knowledge of the company. But ultimately, if the shareholders don't think the board is representing their interests well, the shareholders simply elect different directors.

@@ Line 99: / Line 99: @@
 *[https://www.emeraldinsight.com/doi/pdfplus/10.1108/eb039091 BOARD OF DIRECTORS: The Role of the Board of Directors: Typologies of Interaction -Richard Molz]
 *[https://hbr.org/2012/11/a-more-effective-board-of-dire A More Effective Board of Directors -Ana Dutra]
 *[https://hbr.org/2002/09/what-makes-great-boards-great What Makes Great Boards Great-HBR]
 *[https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/are-you-getting-all-you-can-from-your-board-of-directors Are you getting all you can from your board of directors? -McKinsey]

@@ Line 97: / Line 97: @@
 ===Further Reading===
-*BOARD OF DIRECTORS: The Role of the Board of Directors: Typologies of Interaction [https://www.emeraldinsight.com/doi/pdfplus/10.1108/eb039091 Richard Molz]
+*[https://www.emeraldinsight.com/doi/pdfplus/10.1108/eb039091 BOARD OF DIRECTORS: The Role of the Board of Directors: Typologies of Interaction -Richard Molz]
-*A More Effective Board of Directors [https://hbr.org/2012/11/a-more-effective-board-of-dire Ana Dutra]
+*[https://hbr.org/2012/11/a-more-effective-board-of-dire A More Effective Board of Directors -Ana Dutra]
-*How Boards of Directors Are Reshaping to Meet New Challenges [https://www.forbes.com/sites/christopherskroupa/2017/05/26/boards-of-directors-shaping-to-todays-world/#6b1127927682 Forbes]
+*[https://www.forbes.com/sites/christopherskroupa/2017/05/26/boards-of-directors-shaping-to-todays-world/#6b1127927682 How Boards of Directors Are Reshaping to Meet New Challenges-Forbes]
-*What Makes Great Boards Great [https://hbr.org/2002/09/what-makes-great-boards-great HBR]
+*[https://hbr.org/2002/09/what-makes-great-boards-great What Makes Great Boards Great-HBR]
-*Are you getting all you can from your board of directors? [https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/are-you-getting-all-you-can-from-your-board-of-directors McKinsey]
+*[https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/are-you-getting-all-you-can-from-your-board-of-directors Are you getting all you can from your board of directors? -McKinsey]

@@ Line 1: / Line 1: @@
-A Board of Directors is a recognized group of people who jointly oversee the activities of an [[organization]], which can be either a for-[[profit]] [[business]], a nonprofit organization, or a government agency. Such a board's powers, duties, and responsibilities are determined by government regulations (including the jurisdiction's corporation law) and the organization's own constitution and bylaws. These authorities may specify the number of members of the board, how they are to be chosen, and how often they are to meet.<ref>What is a Board of Directors? [https://en.wikipedia.org/wiki/Board_of_directors Wikipedia]</ref>
+A Board of Directors is a recognized group of people who jointly oversee the activities of an [[organization]], which can be either a for-[[profit]] [[business]], a nonprofit organization, or a government agency. Such a board's powers, duties, and responsibilities are determined by government regulations (including the jurisdiction's corporation law) and the organization's own constitution and bylaws. These authorities may specify the number of members of the board, how they are to be chosen, and how often they are to meet.<ref>[https://en.wikipedia.org/wiki/Board_of_directors What is a Board of Directors?-Wikipedia]</ref>
-'''Board of Directors - How it Works and Why it Matters'''<ref>Board of Directors - How it Works and Why it Matters [http://www.investinganswers.com/financial-dictionary/businesses-corporations/board-directors-4871 Investing Answers]</ref><br />
+'''Board of Directors - How it Works and Why it Matters'''<ref>[http://www.investinganswers.com/financial-dictionary/businesses-corporations/board-directors-4871 Board of Directors - How it Works and Why it Matters-Investing Answers]</ref><br />
 Directors attend board meetings, evaluate [[management]] performance, tend to major decisions (such as making acquisitions or selling the company), declare dividends, create stock-option policies (including approving grants to key managers), and establish executive [[compensation]] packages. Boards of directors often have several committees dedicated to specific decision-making processes. For example, the compensation committee constructs the executive compensation packages and brings them before the full board for a vote; the audit committee evaluates and hires the company's auditors after bringing its research and judgment before the full board, and the finance committee evaluates the merger bids or potential sources of capital. Directors are elected by the shareholders usually once a year and usually at the annual shareholders' meeting. In most cases, directors have staggered terms, meaning that they will not all be up for re-election in the same year. Quite often, the CEO of the company is on the board, and the CFO or even the COO might hold board seats. Most shareholders agree that management's presence on the board brings detailed expertise to the board's decision-making processes, but this can also create conflicts between acting in management's best interests and the shareholders' best interests. Independent directors (also called non-executive directors) are directors who don't work for the company. Non-executive directors are compensated with cash for their directorships; quite often they also receive stock options or stock grants. The Sarbanes-Oxley Act of 2002 introduced new standards for board conduct to ensure that directors are aware of and accountable for the financial condition of the companies they manage. These new standards include holding the board responsible for the integrity of the company's internal controls, but higher accountability is even more evident in the act's requirement that the board of directors of most public companies has an audit committee. This committee must appoint, inspect, regulate, and control the actions of the company's auditing firm. The auditors in turn report directly to the audit committee. Committee members cannot be employees of the company, and companies are required to disclose which members meet the definition of "financial expert." The audit committee must be prepared to address complaints and confidential or anonymous submissions about the company's accounting practices. In most cases, directors are covered by directors' and officers' insurance ("D&O insurance") in order to protect the company against judgments caused by board misconduct.
@@ Line 8: / Line 8: @@
-'''The Job of the Board of Directors'''<ref>What is a Board's Job? [http://governancecoach.com/new-to-policy-governance/ Governance Coach]</ref><br />
+'''The Job of the Board of Directors'''<ref>[http://governancecoach.com/new-to-policy-governance/ What is a Board's Job? -Governance Coach]</ref><br />
 There are three key components to the board’s job.  In order to be accountable for the organization’s performance to the shareholders or “owners,” a board must:
 *Maintain an ongoing connection with the shareholders or owners in order to understand their values and perspectives. Otherwise, how can the board effectively govern on their behalf?  This is often called “ownership linkage.”
@@ Line 17: / Line 17: @@
-'''Types of Boards'''<ref>What Types of Boards are there? [http://www.policygovernanceconsulting.com/about-governance-and-board-work/different-types-of-boards PGC]</ref><br />
+'''Types of Boards'''<ref>[http://www.policygovernanceconsulting.com/about-governance-and-board-work/different-types-of-boards What Types of Boards are there? -PGC]</ref><br />
 There are several common types of boards each having distinguishing characteristics:
 *Collective: A collective is a group of people with a shared focus or purpose. They make decisions collectively and each individual represents themselves and their interests.
@@ Line 28: / Line 28: @@
-'''Types of Directors'''<ref>Types of Directors [https://www2.deloitte.com/content/dam/Deloitte/za/Documents/governance-risk-compliance/ZA_TheDifferentTypesOfDirectors_24032014.pdf Deloitte]</ref><br />
+'''Types of Directors'''<ref>[https://www2.deloitte.com/content/dam/Deloitte/za/Documents/governance-risk-compliance/ZA_TheDifferentTypesOfDirectors_24032014.pdf Types of Directors -Deloitte]</ref><br />
 In law, there is no real distinction between the different categories of directors. Thus, for purposes of the law, all directors are required to comply with the relevant provisions and meet the required
 standard of conduct when performing their functions and duties. It is an established practice, however, to classify directors according to their different roles on the board. The classification of directors becomes particularly important when determining the appropriate membership of specialist board committees, and when making disclosures of the directors’ remuneration in the company’s annual report.
@@ Line 58: / Line 58: @@
-'''Board Governance Models'''<ref>Board Governance Models:A Comprehensive List  [https://www.boardeffect.com/blog/board-governance-models-a-comprehensive-list/ Board Effect]</ref><br />
+'''Board Governance Models'''<ref>[https://www.boardeffect.com/blog/board-governance-models-a-comprehensive-list/ Board Governance Models:A Comprehensive List  -Board Effect]</ref><br />
 Governance is an amalgamation of policies, systems, and structures, along with a strategic, operational framework that aligns organizational
 Nonprofit boards keep the [[Business Mission|organization’s mission]] at the forefront when directing the affairs of the organization. Incoming funds are used to support the organization’s work. Most board members for nonprofit organizations serve on the board because of their passion and commitment to a cause. While serving on a nonprofit board carries a certain level of honor and prestige, board members need to take an active approach to overseeing the organization to prevent problems and legal issues. Nonprofit boards hold responsibility for fiduciary matters, as well as matters that have been delegated to others. There are five common board models for nonprofit boards:<br />

@@ Line 79: / Line 79: @@
 ===See Also===
-[[Staggered_Board_of_Directors|Staggered Board of Directors]]<br />
+*[[Staggered Board of Directors]]
-[[IT_Governance|IT Governance]]<br />
+*[[IT Governance]]
-[[Corporate_Governance|Corporate Governance]]<br />
+*[[Corporate Governance]]
-[[Information_Governance_(IG)|Information Governance (IG)]]<br />
+*[[Information Governance (IG)]]
-[[Information_Security_Governance|Information Security Governance]]<br />
+*[[Information Security Governance]]
-[[Social_Media_Governance|Social Media Governance]]<br />
+*[[Social Media Governance]]
-[[Data_Governance|Data Governance]]<br />
+*[[Data Governance]]
-[[eGovernance|eGovernance]]<br />
+*[[Compliance]]
-[[Compliance|Compliance]]<br />
+*[[Risk Management]]
-[[Risk_Management|Risk Management]]<br />
+*[[Risk IT Framework]]
-[[Risk_IT_Framework|Risk IT Framework]]<br />
+*[[Enterprise Risk Management (ERM)]]