The roles and responsibilities of a board of directors
In PwC’s 2024 Annual Corporate Directors Survey, 35% and 34% of respondents said they intend to add financial and industry skills in the next year, compared to just 10% eyeing candidates with generative AI backgrounds. This suggests that traditional skills will continue to prevail in the boardroom, a nod to what many see as the core roles and responsibilities of boards of directors.
The board of directors exists to oversee corporate objectives and operations and act in the best interest of its shareholders or stakeholders. From the bottom to the top, every role within a corporate board comes with distinct definitions, responsibilities and duties. Each role of a board of directors was designed to manage a specific purpose within the organization.
Board roles and responsibilities need to be clearly defined. The organization’s bylaws typically outline duties for the board, board chair, corporate secretary, general counsel and committees. The duties and responsibilities for C-suite level executives and senior-level managers are usually outlined within the written job description for the role.
Clear communication and expectations for transparency are prime factors in effective collaboration within every role of a corporation — often made easier with board management software. In a perfect corporate world, there shouldn’t be any gaps or overlaps. However, achieving a seamless balance of executive and board roles and responsibilities is easier said than done. Here, we will explain the most essential corporate roles, including:
- What the primary roles and responsibilities of the board of directors are
- Key board of directors roles, from the board chair to the secretary
- How senior management supports board effectiveness
- Resources for building a better board
What are the roles and responsibilities of the board of directors?
Board directors of today are expected to be strategic and effective in driving value. The main role of a board of directors is to perform the duties of strategic planning and oversight. While these terms are used often, it's important not to diminish these duties, as they are the backbone of successful business planning. Their roles and responsibilities also include:
- Keeping the organization financially secure and sustainable
- Managing enterprise-wide risk
- Driving effective board management
- Overseeing environmental, social and governance (ESG) issues
- Building relationships with shareholders
- Upholding their fiduciary duties
- Implementing and maintaining good corporate governance
These mission-critical responsibilities mean that the board of directors is much more than iconic figureheads. When choosing board members to fill vacant seats, boards typically look for specific qualities. Board members expect their fellow board directors to be willing to ask tough and probing questions to vet all sides of an issue.
When corporations hit bumps in the road, all fingers typically point back to the board of directors. Board directors must be willing to act quickly and responsibly when they need to take action to comply with fiduciary responsibilities or to uphold good governance standards. A crisis may occur at any time. Board members’ responsibilities state that they need to stand ready to thwart potential crises and to manage developing crises so they don’t adversely affect the corporation.
Board chair roles and responsibilities
Board chairs interact with nearly everyone in the organization, so the board must select a person to fill the role who can meet the strong expectations that come with it. The board chair’s responsibilities are to:
- Lead and guide the rest of the board
- Serve as the direct liaison between the board and management
- Stay in the loop on all board activities
- Act as an ex-officio member of all committee meetings
- Develop solid relationships with the board directors, the CEO, managers, the corporate secretary and committees in order to lead effectively
- Help the corporate secretary write the agenda, which is used as a tool for facilitating board meetings effectively
- Guide the rest of the board during meetings by focusing on the organization’s vision, mission and strategic direction
- Set a tone for meetings that sets the stage for respect, collaboration and decision-making
- Play an influential role on the executive committee and full board to drive the agenda and identify priorities. This responsibility of board chairs has increased in prominence as corporations find the most efficient way to govern: to form an executive committee that acts as a steering committee to prioritize issues for the full board.
Beyond the day-to-day, board chairs are also responsible for relationship building. Most people who serve as board chairs are keenly aware that they need to develop a trusted relationship with the CEO and other executives.
In a mutually beneficial relationship, the board chair acts as a mentor and advisor to the CEO. Working collaboratively, the board chair helps the CEO to translate the board’s strategic plans into action.
The board chair needs to be willing to ask the CEO the hard, probing questions that come from the board and work in tandem with the CEO during times of crisis. Both parties work best together when the board chair maintains an open-door policy to keep the lines of communication open. Board chairs must also be mindful that their roles are vastly different from the CEO’s responsibilities. The board chair mustn’t usurp the CEO’s authority or overstep the CEO’s role.
The board chair also needs to develop a strong relationship with the board directors and facilitate board meetings so that the board can do its own work. This duty includes encouraging all board members to be actively engaged. The board chair also typically participates in annual board member orientation, onboarding and development.
Roles and responsibilities of the corporate secretary
One of the busiest and most well-known people in an organization is the corporate secretary. Corporation laws in every state require corporations to appoint a corporate secretary. When discussing the role of the corporate secretary, it's prudent to mention that it is evolving along with recent corporate developments. Corporate secretaries are now considered senior positions with major governance and board management responsibilities.
The duties and responsibilities of today’s corporate secretaries often call for the role to be filled by a senior board member with certain areas of expertise. Corporate secretaries’ responsibilities include:
- Serving as the legal representatives of the corporation: Many corporations prefer to choose candidates for corporate secretaries with accounting or law expertise. In fact, some corporations require that the role be filled by a lawyer. Some corporate secretaries perform dual duty as general counsel or another legal role. Keeping in mind the needs of the organization, most corporations expect the corporate secretary to have a master’s degree in administration or commerce, at a minimum. Some boards also expect the corporate secretary to belong to a body of professional accountants or an association of corporate chartered secretaries.
- Setting the agenda: As described by corporate bylaws, one of the corporate secretary's most prominent board duties is creating the agenda and ensuring that all board members and other board meeting guests have the proper reports and other materials in time to review them for the board meeting. The corporate secretary also records minutes during board meetings and prepares a final copy of the minutes for the board to approve at the next board meeting.
- Maintaining good governance: This role and responsibility of the board of directors is a large part of the corporate secretary's role, which includes helping board members with an initial orientation and ongoing board development. The secretary needs to know which reports need to be filed with regulatory authorities and when they are due.
- Holding signing authority: The corporate secretary signs legal documents and bears custody of the corporate seal. For these reasons, it's also important for the corporate secretary to know and understand the history of past laws, the existence of current laws and the potential impact of future laws. This position also requires the corporate secretary to participate in regular legal discussions with the CEO, board, chair, general counsel and other corporate attorneys about legal matters.
Ensure effective governance
Discover Diligent's checklist for corporate secretary's to improve board effectiveness and mitigate all challenges ahead
Discover moreRoles and responsibilities of the general counsel
A lawyer must fill the role of the general counsel. The board views the general counsel position as responsible for:
- Partnering in the business process to help the board ensure their strategic plans fall within the auspices of the law.
- Acting with unquestionable integrity in upholding the law
- Knowing and understanding the legal environment within the industry.
- Identifying and pre-empting any potential reputational issues. The most effective way to do this is for the general counsel to participate in early planning and decision-making with the board and CEO before plans get too far underway.
- Confronting board directors when necessary to hold them accountable for issues that threaten the company’s legal compliance.
- Attending regular and routine board and committee meetings to keep in the loop of current developments. Also, when attorneys attend board meetings regularly, it prevents the rumor mill from perceiving a random meeting as an alarm bell.
- Maintaining a good working relationship with the audit committee and its chair.
Roles and responsibilities of the C-suite
The top-level executives have come to be known as the C-suite. This often includes the chief executive officer (CEO), chief information officer (CIO), chief security officer (CSO), chief operations officer (COO), chief risk officer (CRO) and chief financial officer (CFO).
Each person in the C-suite is responsible for:
- Serving as the final authority in their area of management.
- Working closely with the board
- Overseeing the senior managers, managers and other employees to make sure that they are fulfilling the objectives and strategic plans of the board without creating undue risks.
- Developing a strong working relationship with the board
- Communicating regularly and transparently with the board
- Seeking input from the board and accepting guidance and feedback on strategy.
Having a good relationship with the board ensures that C-suite executives will stand a good chance of gaining the board's support for their many roles and responsibilities. The board chair plays an instrumental role in keeping the lines of communication between C-suite executives and board members open and collaborative.
While the board’s diversity and independence continually challenge C-suite-level executives, they do well to welcome probing questions as opportunities for responsible planning. C-suite executives need to recognize the experience of board members and remain open-minded and flexible in their responses to the board.
It’s wise for C-suite executives to acknowledge that one of the board’s responsibilities is succession planning. C-suite executives sometimes encourage senior managers to make presentations to the board to give the board opportunities to continue developing an internal management talent pipeline.
Roles and responsibilities of senior management
While C-suite executives have the final authority and responsibility, senior managers also play an important role in implementing the board’s strategic plans. Senior managers:
- Plan and direct the work of groups and individuals.
- Oversees such departments as accounting, marketing, engineering, customer support and operations.
- Take corrective action when necessary, either directly or through lower-level managers.
- Approve hiring and firing of individuals and adhere to their department’s budgeting constraints.
- Keep their goals and priorities clear
- Collaborate with other departments at times to execute their duties.
Drive better performance by perfecting the roles and responsibilities of the board of directors
No one role in a corporation is more important than another. Every group and department must work together for the good of the company. In addition to each board member fulfilling their own roles and responsibilities, everyone shares several responsibilities, not least honesty and integrity.
Importantly, when everyone acts in the organization’s best interests, the corporation best serves the public interest. While tools like Diligent Boards, part of the Diligent One Platform, can make it easier to fulfill the board’s many responsibilities, board effectiveness will remain elusive if you lack the right board structure.
High-performing boards result from clear roles and responsibilities for the board of directors that empower each member to act strategically, efficiently and in line with good governance. Download our guide now to learn the ten essential steps to building a high-performing board.
