eli5: How do corporate Boards of Directors work? What is their function? Do they get a salary? Isn’t there a conflict of interest if a CEO of one company is on the board of another company? Do all companies have them? If not, which companies have them and why?
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In the UK a board is more collective responsibility, each director on the board is an executive of their own department. So finance director, HR director etc, the roles chosen can be quite strategic as a board is only manageable at around 6-8 people more than that and it gets quite hard to manage the politics. As such some functions get promoted and demoted, so tech could be within finance or operations, if it’s a fashion company design might be so important in its own directorate. You can in older boards have a chairman and a secretary whoes job is to manage the board meeting, control the adgenda, and record the minutes. If its not on the agenda it doesn’t exist if its not in the minutes it never happened…and all
That.
The managing director is just the manager of each director and overall co-ordination like the prime minister manages his secretaries of state. They usually report to a chairman who has the power to remove them and run the election for the new MD. Its why when there is a scandle the chairman steps down as it effects operations less than if the MD does. But from a reutation point of view the MD Stepping down can be seen as the company is turning its back on the MD
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