What is the role of the board of directors in a company?

The primary role of the board of directors is to represent shareholders' interests in the governance of the company. This includes making decisions that align with the shareholders' objectives, such as enhancing company performance, increasing shareholder value, and providing oversight of management practices. The board acts as a bridge between the owners of the company (the shareholders) and the company's management, ensuring that the management team executes its strategies in a way that meets the expectations and interests of the owners.

By fulfilling this responsibility, the board of directors engages in various activities, such as approving major corporate decisions, hiring and evaluating the CEO, setting the company's strategic direction, and ensuring that the organization adheres to legal and ethical standards. This representative role is crucial, as it helps safeguard the investment interests of the shareholders while guiding the company's long-term success.

The other options relate to different functions that are typically outside the specific role of the board. While the board might oversee certain aspects of the company's operations and financial health, they do not manage day-to-day operations directly, focus only on risk minimization, or narrow their role to financial audits. Instead, their primary focus remains on governance and representing the broader interests of the shareholders.