A board of directors is the central pillar of corporate governance. The board of directors is elected by shareholders to act in their interest. Executive (internal) directors are typically members of senior management employed by the company. Nonexecutive (external) directors have no other relationship with the company. They are also called independent directors.
A board primarily has these two duties – duty of care and duty of loyalty towards the shareholders. A company’s board of directors can have several committees that are responsible for specific functions. For example,