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?

Question

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?

In: 66

Answer 1

A corporate board of directors are ‘hired’ (elected) by the shareholders to supervise/manage/measure the officers (CEO, CFO, COO) who actually run the day-to-day operations of the corporation. They have the power to set executive compensation, and hire/fire the executives.