What is the primary role of a board of directors in a corporation?

The primary role of a board of directors in a corporation is to oversee management and protect shareholder interests. This responsibility involves guiding the company's strategic direction, ensuring that management acts in the best interests of the shareholders, and making key decisions regarding the company’s policies and long-term goals. The board acts as a governance body, holding management accountable for performance and making certain that the company's activities align with the interests of its stakeholders.

In addition, the board often has the authority to appoint, review, and, if necessary, dismiss the management team. This oversight is crucial in maintaining the integrity of the company and ensuring that the organization operates ethically and effectively.

While compliance with legal regulations is essential and part of the directors' duties, it is not the sole focus of the board; they must balance a range of responsibilities. Setting marketing strategies and product pricing typically falls under the purview of management rather than the board. Therefore, while effective governance encompasses compliance, the overarching role is to oversee management and safeguard shareholder value.