3.5.2 Definition of roles of the board and its members

All business and affairs are managed by and under the direction of the board of directors while the officers represent the corporation.1 This means that the board has the freedom to arrange a division of roles among its members, to regulate internally the tasks of, and define the scope of the work of independent directors and officers, of executive sessions and committees. A strong and effective board of directors should have a clear view of its role in relationship to management. How the board organizes itself and structures its procedures will vary with the nature of the business, with business strategy, size and maturity of the company, and with the talents and personalities of the CEO and the directors. Circumstances particular to the corporate culture of a specific corporation may also influence the board's role. The board focuses principally on guidance and strategic issues, the selection of the CEO and other senior executives, risk oversight, performance assessment, and adherence to legal requirements. The officers implement the business strategy and run the company's day-to-day operations with the goal of increasing shareholder value for the long-term.2

Based on federal securities laws, state corporation laws and formulations developed by the Conference Board, the American Law Institute, the Business Roundtable and the NACD, general board responsibilities should include (i) approving a corporate philosophy and mission, (ii) nominating directors, (iii) selecting, monitoring, advising, evaluating and compensating the CEO and officers, i.e. the CEO, CFO, COO, CRO and others, if so agreed (iv) orderly succession, (v) reviewing and approving strategic business plans, risk management programmes, financial objectives and material transactions, (vi) helping ensure ethical behaviour and compliance with laws, (vii) assessing itself, and (viii) performing other functions required by law or regulation.3