The Duties and Liabilities of the Board of Directors
David Larcker and Brian Tayan
Board Responsibilities
In a document called Principles of Corporate Governance, the Organization for Economic Cooperation and Development (OECD) lays out a vision of the responsibilities of the board:
The corporate governance framework should ensure the strategic guidance of the company, the effective monitoring of management by the board, and the board’s accountability to the company and the shareholders.1
That is, the board is expected to provide both advisory and oversight functions. Although these responsibilities are linked in many ways, they have fundamentally different focuses. In an advisory capacity, the board consults with management regarding the strategic ...
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