- Source link: https://bothsidesofthetable.com/startup-boards-ee3ad0389040
- TL;DR: The board comes up with the broader strategic direction in which the company moves, and the management executes that strategy
- How helpful?:4/5
- Topic Tags: Board of directors, management, protective provisions, governance
- Relevant questions addressed:
- How do the roles of management and the board differ?
- How does the board set the framework for management to make decisions?
- Summary bullet points
- Certain board actions, like raising new capital, require “shareholder consent”
- These are often called “protective provisions”
- Role of management: run day-to-day business, make decisions within the framework agreed between management and the board
- Role of the board:
- Come up with budget and strategy
- Periodically (usually quarterly) review progress and make adjustments
- Audit
- Manage compensation for executives
- Vote on key considerations
- Budgets, financings, legal issues, hiring/firing CEO