The board of directors sits between owners and day to day managers. Directors approve major plans, hire and oversee the chief executive, watch risk and controls, and account to shareholders. Executive directors work inside the company; non executives bring independent challenge.
Key takeaways
- Boards set direction and oversee; management runs operations.
- Independence and skills mix matter as much as famous names.
- Directors owe duties to the company, not only to the faction that voted them in.
- Weak boards are a risk factor you will not see on a price chart until trouble arrives.
Why it matters in Ethiopia
Banks, insurers and listed firms are board governed entities. When you invest, you are also choosing a board’s judgement on capital, credit and culture for years ahead.