The Difference Between the C-Suite and a Board of Directors

difference between board of directors and c-suite

At the top of any major company, you’ll find two governing bodies: the C-suite and the Board of Directors (BOD). While C-suite executives are a company’s top dogs, making day-to-day management decisions, they answer to the Board of Directors who represent owners or other stakeholders. And while it might seem like this pits the C-suite vs. Board of Directors, it’s important for the two to coexist together.

As organizations seek to bring in an executive team capable of leading the charge toward growth and prosperity, it’s also important to find a leader who can liaise with the BOD. Here’s how professionals in these two roles differ, and how they must work together to push an organization forward.

What is the C-suite responsible for?

C-suite executives are the highest-ranking members of an organization. C-suite roles include CEOs, CFOs, CIOs and more. Together, they make major organizational decisions that guide a company’s strategic path. From resource management to operations improvement, changes in company culture and more, C-suite executives may be involved in day-to-day processes and/or high-level decision-making of an organization, depending on its size.

CEOs are the at the top of the C-suite, and they’re often elected by a company’s board and/or shareholders. They may be tasked with planning and owning the company’s direction, allocating capital, and even building and managing the rest of the C-suite team. They report directly to the organization’s Board of Directors, proposing action plans that align with the board’s directives.

Often, the board gives the CEO and other members of the C-suite a goal or objective and leave it up to them to create a plan of action of how to reach it.

What is the role of a Board of Directors?

The Board of Directors at an organization or business is a group that represents a company’s stakeholders. It often includes a group of company insiders who are well-versed in the inner workings of the organization, as well as qualified professionals that aren’t part of the company, but offer expertise in an associated area.

The primary job of the BOD is to provide corporate oversight and approve C-suite management policies. From making decisions on stock dividends to setting executive compensation—and even hiring and firing of senior-level executives—a Board of Directors fulfills a variety of roles that help hold the company accountable to those with a vested interest in its success.

How a Board of Directors governs differs from organization to organization, and the way it operates is set out by a company’s bylaws. Bylaws affect everything from setting the number of board seats to establishing a cadence for meetings, setting election procedures and more.

By balancing a company’s management interest with those of its shareholders, a Board of Directors holds C-suite leaders accountable. They need to foster close relationships with all C-suite leaders—especially the CEO—to achieve success.

C-suite vs. Board of Directors

The best C-suite vs. Board of Directors relationship is one where the two groups coexist and cooperate to promote the best interests of the company—and, in turn, its stakeholders. But how can C-suite executives and board members coexist in a productive way?

An organization’s CEO manages the executive team, pursuing goals that push the company forward. The board sets those goals, providing counsel and approval to the CEO. It’s often up to the board to ask challenging questions that uncover all the key details regarding how an organization operates.

While the C-suite team and a board may disagree at times, the disagreements should strengthen the company, rather than serve as a distraction that dampens its competitiveness.

How to build rapport between the two

As CEOs interact and relate to their Board of Directors, they should set clear expectations about the relationship, develop transparency and establish clear lines of communication. Not only does this establish mutual confidence and a sense of trust, it also fosters a sense of engagement among all parties.

While it’s not uncommon for a CEO and the Board of Directors to face conflicts over priority or execution, these disagreements shouldn’t threaten either an organization’s short-term success or long-term objectives. Often, the way disagreements are addressed—rather than what’s disagreed about in the first place—can lead to better outcomes.

Should conflicts of interest arrives, C-suite executives should try to understand the board’s point of view, and vice-versa. By communicating clearly and professionally with the board—and seeking compromise where possible—strong communication and good conflict resolution skills can help C-suite executives, and a business as a whole, avoid worst-case scenarios.

Hiring for C-suite or the BOD takes precision

A balanced relationship between an organization’s C-suite vs. Board of Directors is essential when it comes to the long-term growth of a business. Finding the right C-suite talent, as well as finding effective board members, takes precision, skill, and time.

By relying on an executive search company to find top-tier talent to fill these roles, you can keep your focus on propelling your business forward, and leave the hiring to a reliable partner.

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