Get to know more about Board of Directors vs Executive Management. How do they differ from each other? Let’s take a look at this article. So, read on to learn more.
Board of Directors vs Executive Management – The Difference
A business cannot operate smoothly without an effective management team. On the other hand, it can’t survive without a clear set of goals and objectives. Things that are most often driven by the board of directors. Without these two groups, a business or corporation can’t run efficiently or effectively. A board of directors is made up of people who represent major shareholders in the company. They are elected by shareholders for a set period.
On the other hand, executive management is the group that is responsible for managing the daily operations of the company. They are also tasked with ensuring that goals and objectives are met. However, they don’t make decisions regarding what goals and objectives should be met. Rather, they make sure that these decisions are carried out with little to no deviation from what has been determined previously by the board of directors.
What Does a Board of Directors Do?
The board is responsible for making sure that legal obligations are fulfilled in addition to considering factors. Such as ethical standards when making decisions about strategic growth and development in the company. A board also helps in monitoring management performance to ensure that goals and objectives are met effectively. Additionally, they act as an advisory board when it comes to identifying business opportunities for growth and expansion.
The job of a board is not limited to just setting goals and objectives or monitoring management performance. A board also helps in planning strategies for dealing with potential risks involved with the growth and development of a business. They do this by putting together contingency plans during times when the company faces any kind of uncertainty or dilemma. Furthermore, they oversee financial matters including budgeting and cash flow activities within a company or corporation.
What Does Executive Management Do?
Executive management manages daily operations inside a company or corporation while helping employees meet strategic goals established by the board of directors. They make sure that all plans, policies, procedures, rules, regulations, etc., set forth by the board are effectively carried out within the corporation daily.
The executive management team usually includes high-level managers who oversee daily operations inside departments such as human resources, production, accountants, and the finance department. They are also responsible for ensuring that all legal requirements are met according to local regulations or regulations administered by government agencies such as the IRS (Internal Revenue Service).
Additionally, executive management ensures that all plans, policies, procedures, etc. are carried out efficiently and effectively to meet the goals set forth by the board of directors.
A board of directors is an advisory group that helps in making decisions regarding the future growth and development of a company. On the other hand, executive management is responsible for managing daily operations as well as carrying out the decisions set forth by the board of directors. In the end, it’s important to remember that both groups are equally important to a corporation or business. So, before making any decisions, it’s best to consider both groups and their perspectives.