Today, we’ll continue in detail what we started in the previous article about corporate boards of directors of joint-stock companies, We find that the board of directors has sufficient powers and authority to carry out all necessary actions to manage the company’s operations and achieve its objectives, and these powers and authority are limited only by what is stipulated in the law or the company’s bylaws.
Boards of directors and their members achieve peak performance when they fulfill their responsibilities, exert their utmost effort, and leverage their knowledge, experience, and expertise. The board of directors must comply with the provisions of the laws and regulations governing the company’s incorporation; the board may not engage in any activity unrelated to the company’s business or waive the company’s rights vis-à-vis third parties. Furthermore, the board’s authority is not absolute; It is not authorized to amend the company’s articles of incorporation or bylaws, nor to decide on the merger, liquidation, or increase or decrease of the company’s capital, nor to dismiss the chairperson or any member of the board without referring the matter to the competent authority for approval of the decisions issued. In summary, the Board of Directors is responsible for the administrative, financial, planning, organizational, and technical tasks necessary to conduct business and achieve the company’s objectives, as follows:
– Appointing the CEO, defining his or her powers, and supervising his or her work.
– Implementing the decisions of the competent authorities and monitoring their implementation.
– Preparing the final financial statements for the previous year within the first six months of each year and preparing a comprehensive report thereon, including the results of the annual plan’s implementation, which shall include: (the general budget – the profit and loss statement– Cash on hand – Statement of sales realized – Statement of purchases – Appointment of an auditor – Studies and planning using a scientific approach – Provision of necessary resources).
In the event of violations committed by members of the Board of Directors, liability shall rest with all members of the Board, provided that the error resulted from a unanimous decision; if the decision was passed by a majority vote, those who objected to the decision shall not be penalized, provided that this is documented in the minutes of the meeting at which these decisions were made.
Customer satisfaction, a good reputation, and increased profits are among the most important goals of companies; therefore, boards of directors must operate in accordance with scientific principles and legal and ethical standards, for success goes only to those who deserve it.
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