The Board of Directors is what? Functions and responsibilities of the board of directors

The Board of Directors of the enterprise is one of the key corporate bodies responsible for business development and ensuring the stability of the company. What are its main functions? How is the board of directors of the enterprise formed?

What is the board of directors?

To begin with, consider what can be understood by the term in question. The Board of Directors is the main management body of the enterprise in the periods between holding general meetings of the shareholders of the enterprise. The main task of this structure is the development of a business development strategy, as well as control over its implementation by the authorized divisions of the company.

Despite the large amount of authority, the board of directors, as a rule, does not directly affect the work of the company's executive structures. He must carry out his activities on the basis of the company's charter, as well as local regulatory sources - such as, first of all, the Regulations on the Board of Directors, which is adopted by the general meeting of shareholders of the company.

The main function of the internal corporate structure under consideration is to manage the activities of the economic company - in particular, the joint-stock company. But it must be carried out taking into account the fact that certain issues can be directly attributed to the competence of other management bodies of the enterprise by the norms of law. For example, the same general meeting of shareholders.

Requirements for the establishment of the management structure

The Board of Directors is an internal corporate structure that must necessarily be established in a joint-stock company in which there are 50 or more shareholders. At least 5 members must be present in its membership.

In the event that there are more than 1000 securities owners in the JSC, then at least 7 members must work in the board of directors. If the shareholders - more than 10 000, then the composition of the structure should be attended by at least 9 members.

Certain features are characterized by the board of directors in OOO. Let's study them in more detail.

Board of Directors LLC: nuances

The Board of Directors of a limited liability company in accordance with the legislation of the Russian Federation is a structure that can be established based on the preferences of the owners of the LLC, that is, its formation is not mandatory regardless of the indicators of the economic activity of the enterprise.

In practice, the activities of the board of directors in LLC depend, first of all, on the provisions of the charter of the relevant economic company, as well as internal regulations governing the management of business. The election of the members of the board of directors of the LLC may be carried out optionally on a cumulative basis: it is sufficient to establish a simple majority of those business participants who vote at a general meeting.

Consider the key powers that characterize the board of directors of the company, in more detail.

Main powers of the management structure

First of all, the relevant internal corporate structure is authorized to exercise control over the work of the executive bodies - but not to interfere with the decision-making procedures for them, as we noted above. The main thing here is to ensure that their activities comply with the decisions taken at general meetings of the company's shareholders. Carrying out this line of activity, for example, in a joint-stock company, the board of directors forms, upon the proposal of the head of the firm, the relevant executive structures. As agreed with him, the management board of the joint-stock company may be authorized to take decisions related to the disposal of certain property, issues of investment, conclusion of major transactions, the value of which exceeds a certain percentage of the turnover of the enterprise.

The Board of Directors of OJSC (after the reform - JSC) in most cases is authorized to determine the key directions of the internal corporate policy in terms of obtaining or issuing loans, providing guarantees, using certain sources to cover costs and meeting possible claims from creditors. The structure in question may have powers related to the issue for discussion in the general meeting of issues related to the necessary reduction in the size of the company's authorized capital.

The Board of Directors is the body that in many cases is responsible for distributing the profit of the enterprise. For example - in the form of dividends in favor of shareholders or, alternatively, in the form of fees paid to employees of the firm. At the same time, as for dividends, it is usually not the authority of the general meeting of shareholders to determine their size without taking into account the opinion of the board of directors. But in many cases, this body has the right to reduce the amount of corresponding payments without agreement with the structure in question.

Another notable type of authority that characterizes the board of directors is participation in the definition of the structure of enterprise management, the establishment of branches, subsidiaries. This line of activity of the relevant structure involves the participation of its representatives in the general meeting of shareholders. At the same time, the decisions of the board of directors in this case can mainly be advisory in nature.

It can be noted that the board of directors is a corporate body, which can be called in different ways. So, in accordance with the legislation of the Russian Federation, the relevant structure can be called the Supervisory Board.

Functions of the management structure: determination of the company's development strategy

Let's consider now what functions the board of directors of a bank, an industrial enterprise, a service sector company can perform - despite the fact that the activity of firms depends to a large extent on its profile, on the activity segment, the main functions of the corresponding corporate structure can be common for most spheres Business.

The main function that characterizes the work of the board of directors of a modern enterprise is the definition of its development strategy. That is, set long-term priorities in the development of the company. At the same time, managers who are members of the board of directors can devote considerable attention to solving current problems, considering the current economic situation, taking into account which the business is built.

But, one way or another, the council's task is to approve long-term development plans for the firm. An approach is widely used, according to which they are approved once a year, and an annual meeting of the board of directors is convened to review the relevant document. As part of this function, the corporate structure under consideration can actively interact with other competent bodies of the enterprise - for example, with the financial department, marketers, accountants, appeal to outside structures, consultants.

The result of the council's exercise of the function in question is the formation of documents that are compulsory for execution by the competent specialists of the enterprise. At the same time, their structure can include a basic plan and a large number of various auxiliary sources.

Functions of the Board of Directors: control over the financial and economic activities of the firm

The next most important function performed by the board of directors is to exercise control over the financial and economic activities of the enterprise. This line of activity of the internal corporate structure in question is primarily aimed at ensuring the implementation of the provisions of those plans that are formed within the framework of the performance of the previous function by the council.

The system of control over the activities of responsible specialists in the framework of their compliance with the requirements contained in the plan implies the use of a wide range of methods: a detailed study of reporting documents, training of specialists if necessary, organization of local meetings on various issues of implementing the enterprise development plan. The exercise of the function in question by the board of directors must comply with the requirements of the law in the event that certain activities of managers are under the jurisdiction of certain sources of law.

The most important role in exercising control over the implementation of the plan can be played by other governing structures of the economic society - such as, for example, the shareholders' council. The Board of Directors can actively interact with them on a wide range of issues. In particular, a common theme of the relevant corporate structures can be the development of an effective strategy in building a risk management system that characterizes business development. Only if such a resource is available, the company will be able to fulfill the plans developed by the board of directors in the performance of its previous function. Among the relevant risks are currency restrictions, low liquidity, the emergence of legal restrictions, a political factor. They should be considered as part of monitoring the implementation of the business development plan.

Functions of the management structure: protection of the rights of owners and shareholders

Another important function performed by the Board of Directors is to ensure the protection of the rights of owners and shareholders of the enterprise, resolve disagreements arising within the framework of corporate legal relations. To implement this function, the structure in question can be endowed with a number of special powers. For example, related to the appointment of a person responsible for implementing the rights of business participants and protecting their interests. Settlement of disagreements within the company can be carried out both taking into account the provisions of local sources of norms, and subject to compliance with the requirements of regulatory legal acts in the jurisdiction of which are legal relations with the participation of partners.

Functions of the Board of Directors: ensuring the effective functioning of executive structures

The next key function of the board of directors is to ensure the effective operation of the company's executive structures. To this end, responsible managers can also use the mechanisms provided for by internal corporate norms or provisions of regulatory legal acts, if they regulate a particular area of activity of executive bodies of enterprise management. This function assumes that the council is given a fairly wide range of powers, for example, related to the appointment and dismissal of the general director of the enterprise.

The status of a member of the board of directors: nuances

A member of the board of directors is any individual, and it is not necessary that it be a co-owner or a shareholder of an economic company. This status, however, in terms of powers is characterized by a number of restrictions. Namely:

- the composition of the company's board of directors can be formed from representatives of the collegial body by not more than one quarter,

- the chairman of the board of directors can not be the general director of the enterprise.

Members of the board of directors can be elected to their posts only in the cumulative voting order . At the same time, a person receives the relevant status for a period until the next annual general meeting of shareholders of the enterprise. A member of the board of directors has powers that can not be terminated ahead of schedule in the event that they are available to other participants of the business in a similar status.

Let us consider the specifics of the work of the person who heads the corresponding structure, in more detail.

Features of the Chairman of the Board of Directors

Chairman of the Board of Directors - a person who is elected to his position from the membership of this intracorporate structure. At the same time, this procedure should be carried out at the first meeting of the Council. In many cases, the chairman of the relevant body has the widest range of powers. So, it is common practice to directly influence the activities of the CEO of the company and other top managers, help them make decisions, improve their skills.

The head of the board of directors has a number of special competencies. These may include:

- planning the activities of the internal corporate structure headed by him (the chairman determines when a meeting of the board of directors should be held, how long it should last);

- Moderation of discussions on business issues;

- control over compliance with the rules of the meetings;

- summarizing the discussions.

The head of the relevant structure usually puts various questions to the vote, helps his colleagues to adequately consider the arguments for and against making certain decisions. At the end of voting, the chairman forms the minutes of the board of directors, which records the results of discussions on business development.

In many cases, the head of the enterprise management body in question also presides over various committees. For example - responsible for personnel matters, for the payment of rewards.

Compensation of labor of members of the board of directors is a significant aspect of the activity of the relevant structure. Let's study it in more detail.

Payment of remuneration to members of the Board of Directors

In accordance with common practice, remuneration to the boards of directors is usually assigned the same amount of compensation for the work performed within the framework of competences that are defined by law or by local regulatory enactments of the enterprise. In many cases, remuneration for solving tasks that characterize the activities of the board of directors is stipulated by the contract of an employee of a firm that is a member of this council. For example, if this is one of the top managers, compensation for work as a member of the board of directors is transferred to him along with the basic salary on the position he holds in the management structure of the firm.

Also, the approach is widespread, according to which business participants in the status of members of the board of directors receive remuneration, the amount of which is determined on the basis of the results of the activity of the relevant corporate structure. At the same time, it can be applied as an individual approach - when the results of the work of a specific manager are evaluated, as well as consideration of the results of the work of the members of the board of directors as a whole.

The results of a decision of the board of directors can be evaluated from the point of view of business performance, revenue growth of the company, expansion of markets, other significant criteria that the owners of the firm determine.

It can be noted that in Western countries the approach is widespread, according to which the members of the board of directors are insured for protection against negative consequences of the decisions made, as well as covering the various costs that arise in the process of overcoming the consequences of these decisions. But the definition of the responsibility of managers in the status of members of the board of directors can be fixed in a contract whereby a company that has established a corresponding internal corporate structure can compensate for a part of the losses.