Some boards of directors position themselves as working boards, indicating that they are active volunteers rather than a governing body. Working boards are most often found in companies with small hires and small budgets. But in reality, works councils perform many of the duties of a governing board, being responsible for the overall policy and strategy of their company. The board of directors is the highest governing body, the success of which also determines the health of other departments of the company. So what do the definitions of working board vs governance board and what is the difference? Read more about it in this article.
Working board and Governance board: definitions
Working boards are a group of executives with additional responsibilities and duties. They carry out the direction of the board, which they appoint themselves. Some may see this as a failure to allocate responsibilities, but it is very important that works councils act by the board’s instructions, not engage in self-dealing. A works council requires the formation and installation of clear structures that will allow them to gradually follow directions, respond more quickly, and act flexibly.
A governance board (a board of directors), is a traditional type of board that is not involved in the day-to-day business of the company and meets regularly every few months. At the meetings, the board discusses the main problems of the organization and decides the plan of action by voting. In this type of board, board members are periodically replaced by new board members, and their main style is to observe and follow the higher-level strategy. All their decisions are unquestionably implemented by the CEO of the company and other employees.
Different types of boards
There are other types of boards such as:
- Collective – a collective is a group of people with a common focus or purpose. They make decisions collectively and each person represents themselves and their interests
- Advisory Board – board serves to provide insight and perspective to any decision-maker, including boards of directors. A site advisory board usually has no authority of its own but works to form a person or body
- Governing/Executive Boards – which run the company as a collective group (instead of one CEO). This is not the same as a governing board, but they can work under it. They make day-to-day decisions about what will be done and long-term decisions about how to organize activities to achieve the organization’s goal
- Fundraising boards – A board is often a “board” in name only. Its real purpose is to use the connections and influence of its members and influence to raise resources for the organization
- Policy Council – This refers more to how a council does its job than to the type of council. A policy board is any board, usually a governing board, that directs operations by developing policies that determine operational decisions rather than making a yes or no decision itself. The CEO is then expected to implement all policies.
Working Board Vs Governance Board – Main Differences
The main difference between a working board and a governance board is that they carry out a lot of directives in-house, rather than just giving directions and watching from the sidelines. This board works to execute its governing strategy, not just make a quality plan for it.
The typical board of directors has far fewer responsibilities than the working board. Therefore, because of their free time, they can take on fundraising responsibilities. To do so, they use their valuable connections and spheres of influence to protect the company’s interests and serve its good.