The legal structure of an organisation and its bylaws define the responsibilities and powers of the management board. These specific powers could be defined in bylaws. In spite of the specific terms however, the majority of boards don’t hold unlimited power; they delegate decision-making to senior managers (or, in the case of non-profits, staff). The ultimate goal of the board is to decide whether these decisions contribute to satisfactory performance for the organization as an entire.
In the case of public companies, the board is legally obligated to act as fiduciaries and represent the owners of shares and stock as well as to ensure that management isn’t in the process of wasting money, damaging assets, or infringing on the law. In a sense, the board is in a position to evaluate the performance of the CEO and make decisions about the compensation of the CEO.
A lot of boards are involved in many other areas as well. These might include managing resilience and risk, sustainability, corporate strategy and digitalization and technology. To achieve this, boards have to be able to assume more responsibility and be more productive, as they need to keep up with any new areas of concern that could arise.
However when the board begins to encroach upon the responsibilities of management by making decisions that could only be made by the full board or by assuming management duties, it risks upset a system that was specifically designed to achieve high-efficiency organization success. In fact this kind of structure could even cause a rise in turnover for the CEO and other managers, as they lose confidence in the capacity of the board to handle issues when they go off the rails.