What is the Role of the Board of Directors?

Thomas Fox

One of the ongoing topics for various Foreign Corrupt Practices Act (FCPA); UK Bribery Act or other anti-corruption and anti-bribery compliance conferences is what information does a Board of Directors want or need for oversight of a compliance program? However today I would like to step back and focus on the initial question of “What is the role of a Board of Directors?” In a recent preliminary draft of a White Paper entitled “Corporate Governance of Social Enterprises” (herein “the White Paper”) a group of European authors, Ann-Kristin Achleitner, Judith Mayer, Andreas Heinecke, Mirjam Schöing and Abigale Noble (collectively “the authors”), explored this most basic question and others including such topics as Board of Directors make-up and selection; Board of Directors meetings and management of the Board and its relationship with a company’s management.

A Board of Directors will probably have an Audit Committee or Compliance Committee. I would like to focus on the role of the entire Board of Directors, rather than a specialized subcommittee. By reviewing the role of a Board of Directors within an organization, this should shed light on the types of information that a compliance officer should be prepared to present to the. Starting with the proposition that a “well run Board can lift a significant burden off of the management team in the short-term and ensure the long-term success” of an organization, the authors posit three general areas. They are (1) Support; (2) Supervision; and (3) Approval of Management Decisions.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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Thomas Fox

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