ABSTRACT
Management is ultimately responsible for the company performance, and the board exists to control and direct management. The board should periodically review management's performance relative to the targets set through the planning process. It is important to align the board’s responsibility to direct and provide oversight on management’s responsibility to plan and deliver performance, both in the short- and long-run. The board may review and approve, or disapprove, all investments proposed by management above a preestablished threshold amount and “in sync” with the company’s strategic plan. A management-board dialog could result in internal validation of the plan and a degree of comfort to the executives due to support from the board. Monitoring management’s performance is clearly an important board duty. If management develops a strategy to restructure debt or increase debt leverage, the board would be interested in knowing the detailed plans and may even insist on the board approval of the plan.
