A board of directors legally represents the interests of a corporation’s stakeholders. Those stakeholders include stockholders of a publicly held corporation, donors to a nonprofit corporation and/or the communities served by either. As their representatives, the board members have the responsibility of establishing, guiding and assessing the overall direction of the corporation.

Strategic Direction

Board members set a corporation’s strategic direction by establishing policies and goals to guide the chief executive and other leadership.

Manage CEO

The board of directors hires the chief executive officer (CEO) and then delegates the day-to-day operation of the corporation to him or her. The CEO reports directly to the board members who define the chief executive’s job responsibilities, provide guidance and support as needed and assess the CEO’s performance annually.

Organizational Governance

The board formulates the rules of governance for the organization and establishes procedures for oversight of its policies and procedures. When questions of policy arise at the highest levels, the board may be involved in determining the relevance and determining a final outcome.

Account to Stakeholders

Corporate stakeholders hold board members accountable for products or services and regularly scheduled financial reporting. In some cases, board members can be held financially and legally responsible for decisions made by the corporation.


Board members should plan to attend meetings on a regular basis, participate on a standing and/or ad-hoc subcommittee, be familiar with the products and/or services of the organization, help promote the organization, and understand other policies and procedures. In the case of a nonprofit organization, board members will be expected to support the organization’s fundraising efforts.

Length of Term

Time commitments vary by organization, but usually range from one- to five-year terms.