The board of directors is a company’s decision making body and can range from one individual to several. Directors have a fiduciary duty to their company and a responsibility to act in the company’s best interests. They oversee the company or appoint officers to assume those roles. In many small companies the directors are also shareholders. Larger companies, particularly public ones, may bring on a full board of directors, among them professional outside directors.
The board of directors is responsible for ensuring that the company collects and pays its taxes, files its annual reports and oversees any lending decisions the company may pursue. As the company grows, directors may also be liable for environmental pollution, workplace harassment or unpaid wages if/when necessary. Companies are able to minimize these risks when they have policies in place that safeguard due diligence and prudence, as well as liability insurance.