Definition
Board of Directors
The board of directors is the group elected by shareholders to oversee a company's management and set its strategic direction.
The board is the apex governance body, responsible for appointing and supervising the CEO and senior management, approving strategy and budgets, overseeing risk and controls, and protecting shareholders' interests. Under the Companies Act and SEBI listing rules, a listed company's board must include independent directors and meet composition norms.
Directors owe fiduciary duties to the company. The board works through committees — audit, nomination and remuneration, stakeholder relationship — and is accountable to shareholders at the AGM. Board quality is a core element of corporate governance.
Related terms
- Independent DirectorAn independent director is a board member with no material relationship with the company, brought in to provide objective oversight.
- Executive vs Non-Executive DirectorAn executive director is part of day-to-day management, while a non-executive director sits on the board without an operational role.
- Audit CommitteeThe audit committee is a board sub-committee that oversees financial reporting, internal controls, audits and related-party transactions.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.