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Board of Directors Vs. Officers

by Michael Mageean, studioD

Open markets and new technology are creating commercial opportunities and threats like never before. U.S. companies need sound strategic judgement from their directors and c-suite officers more than ever. An organization's board of directors, according to Deloitte’s Governance Framework, monitors its executive managers but when it comes to formulating company strategy, protecting corporate reputation, general performance and risk management they take the lead. Deloitte also says the c-level officers, who comprise the senior management team, need to “make swift, high quality decisions that support the execution of [a company’s] overall strategy and meet financial targets.”

Board of Directors

Generally, directors set strategic priorities for the c-level officers and it's their responsibility, as the Dell board of directors puts it to "direct, guide and oversee" the conduct of the company's business and promote the interests of the company's stockholders. In achieving these aims one of the jobs of a board of directors is to oversee the selection of senior executives to make sure they get the right candidate. They also work closely with c-level officers in developing risk management strategies.

C-level Officers

According to the U.S. Bureau of Labor Statistics, c-level officers oversee the achievement of financial and budget objectives and manage general operations like Information Technology and Human Resources. They also analyze the company’s financial information and decide how to boost sales, open new market opportunities and improve its operational efficiency. Deciding on the appointments of middle managers also falls within their remit.

Differences between officers and boards of directors

The fundamental difference between directors and officers is the difference between deciding strategy and implementing it. The strategic decisions are high risk and are decided by the board. The c-level officers provide data and reports to help the directors decide on the company’s strategic direction. The officers are in charge of the day-to-day performance of the organization’s departments, like product development or IT. They lead the organization in the direction decided by the board.

Similarities between officers and directors

The only officer's role that has any similarity to a director's is that of the CEO. The CEO has a unique relationship with the board. The CEO’s “views are the ones boards are most likely to heed,” according to an article in the Harvard Business Review. The CEO will have a close relationship with the directors. In fact, the Bureau of Labor Statistics reports that a CEO might sometimes be called the executive director. And like the board the CEO will have a strategic vision for the company and clear ideas on the direction it should take. The other c-level officers report to the CEO and he will have a lot of influence with the directors.

Role Profiles

Board members usually have decades of experience in business and management. “Board members are supposed to bring long-term prudence to a company,” according to a Harvard Business Review article. They tend to be cautious when making strategic decisions. CEOs, like directors, are expected to have a strategic vision and are usually younger and have more of an appetite for risk leading to tension with the directors. Again, the Harvard Business Review reports some CEOs think that boards, “can rein in boldness too tightly” when managing their executives. The other officers need to have an understanding of strategic thinking and have the drive and tenacity to realize the board’s vision.

About the Author

Currently working in Dublin, Michael Mageean started out writing for Belfast-based “Fortnight” magazine in 1998. Recently he has written for Verify Recruitment’s technology blog, newsletter and scripted Verify's radio show, "New Job Radio." He trained as a journalist with the London school of Journalism in 2012. He is a graduate of the University of Ulster.

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