What is BOD? The role of BOD in corporate governance

In the organizational structure, BOD plays an extremely important role in the development of businesses, helping businesses stay on track and survive in the market. So what is BOD ? Let's learn with 1C Vietnam about BOD, the role and criteria required of a professional BOD!

1. What is BOD?

BOD stands for Board of Directors, also known as the board of directors, which are senior leaders elected to represent the shareholders of the business. BOD acts as a management agency, responsible for setting strategies and monitoring the company's business activities through regular meetings.

This is considered a mandatory position that any business must have, they represent the listed shareholders of the organization, and support senior management with guidance and advice. timely consultation.

2. What positions does the BOD department include?

BOD belongs to the highest level management department, directly participating in the management and direction of the organization's activities. At the same time, BOD also represents shareholders, internal and external members.

The BOD department often includes core members such as the Chairman, Internal Board of Directors, and External Board of Directors. Each position has unique characteristics and tasks. Specifically:

• Chairperson

This is the highest position in the organization, playing an important role and has great power. At the same time, the chairman is also the head and leader of the Board of Directors or can also be the CEO of the company.

• Internal Board of Directors

Including members of the Board of Directors, this position is assigned to supervise and manage the organization's internal activities such as: Evaluating and ensuring efficiency, risk management, and loss detection. gaps, errors, fraud... and provide solutions.

• Board of Directors for Foreign Affairs

This is the department that manages and operates strategies related to the organization's foreign relations. At the same time, responsible for establishing and maintaining effective external relationships such as meeting customers, partners, media units...

In addition, it will depend on the size of each business to determine different director positions. Normally, businesses with a global scale will have the following director positions:

• Marketing manager
• Business manager
• Creative director
• Product development director
• Operation Director
• Director of development and investment

3. The role of BOD for businesses

In almost every business, whether large or small, the BOD position plays an extremely important role in the direction and operation of the business. Below are some important tasks that BOD undertakes:

• Monitor and supervise business activities, and ensure that audit activities are completed fully and most effectively.
• Establish and build a business management system, ensuring that the working process of each department and department is always seamless and within the set framework.
• Make decisions about detailed goals and implementation strategies for the development of the entire organization.
• Organize annual meetings and exchanges between internal BOD members to discuss the general situation of the business as well as plan for the next year.
• Effectively carry out entrusted tasks from shareholders, while ensuring the rights of investors and shareholders in the enterprise.
• Build a vision and mission for the business, helping the business stay on track without deviating from its goals.
• Recruit and train talents, improve employee capacity.
• Decide on important strategies such as mergers, acquisitions, stock splits, new product promotions...
• Handles financial matters, approving or amending the organization's annual budget.
• Directly participate in crisis management, represent the organization and take responsibility for your actions.

4. Responsibilities of BOD in the company

The Board of Directors (BOD) plays an important role in managing and directing the company's strategies. In addition, to properly perform its duties and increase its own value, BOD also needs to carry out the following responsibilities:

4.1 Business administration and management

BOD is responsible for controlling and reporting annual revenue, and closely monitors and supervises the work of auditors.

4.2 Evaluate and select potential personnel

BOD is also the main decision maker in assessing capacity and selecting potential Board members. Because it is the person who best understands the capabilities of each employee, BOD will propose and select the appropriate factors to run the business effectively together.

4.3 Monitor the financial activities of the enterprise

The Board of Directors plays an important role regarding the survival of the business through regular financial monitoring. From there, BOD will clearly understand the revenue and expenditure situation and financial capacity to promptly deploy plans and solutions.

5. Necessary qualities of BOD members

Because they are directly involved in the management of the business, board members need to have the following important qualities to effectively manage and promote the development of the organization:

• Leadership

BODs are the leaders in an organization, so BODs need to possess great leadership abilities. This greatly affects the management, supervision and assignment of tasks to each department, ensuring seamless work performance.

In addition, leadership thinking also helps the Board of Directors lead the business in the right direction, develop and achieve its goals quickly.

• Look far ahead

A professional BOD needs to have a general perspective on the present and the future to bring many development potentials, especially in today's vibrant competitive market. Besides, BOD must also have the ability to predict, detect and prepare for long-term business strategies, bringing sustainable development to the organization.

• Take advantage of talent

Employees play an extremely important role in a position. If BOD knows how to grasp the strengths and limitations of employees, create conditions for them to develop their strengths and divide work appropriately, then the business will develop more effectively and strongly. ever.

Through the complete information that 1C Vietnam has provided above, surely your business has a suitable answer about what BOD is . Through that, 1C Vietnam hopes that the above knowledge has helped your business understand the importance of BOD in your business system. In order to support BODs to operate businesses effectively, 1C Vietnam provides a comprehensive resource management solution 1C:ERP, developed on a modern low code platform, easy to tweak, suitable for all models. business model of the enterprise. To experience 1C:ERP solution, contact 1C Vietnam immediately