{"id":3432,"date":"2021-05-12T07:36:39","date_gmt":"2021-05-12T07:36:39","guid":{"rendered":"https:\/\/www.iese.edu\/standout\/?p=3432"},"modified":"2023-10-16T15:49:53","modified_gmt":"2023-10-16T15:49:53","slug":"board-directors-good","status":"publish","type":"post","link":"https:\/\/www.iese.edu\/standout\/board-directors-good\/","title":{"rendered":"What is expected of a good board of directors?"},"content":{"rendered":"

[vc_row css=”.vc_custom_1559140963143{margin-top: 0px !important;margin-bottom: 0px !important;padding-top: 0px !important;padding-bottom: 0px !important;}”][vc_column css=”.vc_custom_1559216895048{margin-top: 0px !important;margin-bottom: 0px !important;padding-top: 0px !important;padding-bottom: 0px !important;}”][vc_column_text css_animation=”bottom-to-top”]Professionalism, collegiality and diversity. These are the three words that define today’s board of directors.\u00a0<\/span>The mission of this governing body is\u00a0<\/span><\/b>to set the long-term direction of the company and to ensure its sustainability.<\/span><\/b>\u00a0<\/span>\u00a0<\/span><\/p>\n

\u201cThe board creates the company of tomorrow, starting today,\u201d<\/span>\u202f<\/span><\/b>explains\u202f<\/span>Josep<\/span>\u00a0<\/span>T\u00e0pies<\/span><\/a>, professor emeritus of Strategic Management of IESE Business School<\/span>.<\/span><\/b>\u00a0The board of directors supervises, controls and governs. Appointed by shareholders, it leads the company towards the imagined and desired future.<\/span><\/p>\n

Good governance: ensuring the sustainability of the business<\/span><\/b>\u00a0<\/span><\/h2>\n

Directing is not executing. Managing is not setting the company\u2019s direction. They are different responsibilities within a company and confusing them can jeopardize the sustainability and future of the business. What tasks fall to general management and what tasks belong to the board of directors?<\/span>\u00a0<\/span><\/p>\n

General management has a wide variety of mandates and duties, ranging from planning activities and producing goods and services to leading teams and guiding the people comprising the organization. Ultimately,\u202fit must\u00a0<\/span>create value for the owners, shareholders, employees and society as a whole<\/span>.<\/span><\/b>\u00a0<\/span><\/p>\n

In turn,<\/span>\u00a0the board of directors is responsible for charting the course of corporate actions<\/span><\/b>\u00a0and\u00a0<\/span>aligning the shareholders\u2019 interests with the good of the business<\/span>.<\/span><\/b>\u00a0Herein lies the essence of corporate governance.<\/span>\u00a0<\/span><\/p>\n

The manager decides how things are done, the government determines what to do and who should do it. The former is a technical mission while the latter is a political mission, and both are essential for the company to run smoothly.<\/span>\u00a0<\/span>[\/vc_column_text]

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