You are correct that the CEO's primary responsibility is to lead the company, while the board's role is to oversee and guide the CEO in carrying out their duties and responsibilities.
The board of directors is responsible for setting the strategic direction of the company, overseeing its operations, and ensuring that the company is being managed in the best interests of its shareholders. They do this by establishing policies, making major decisions such as mergers and acquisitions, and monitoring the performance of the company's management, including the CEO.
The board is also responsible for hiring, evaluating, and compensating the CEO, and they can make changes to the CEO's employment or remove them from their position if necessary.
While the CEO is responsible for the day-to-day management of the company, the board provides oversight and guidance to ensure that the CEO is acting in the best interests of the company and its shareholders. This includes reviewing and approving the company's strategic plans, budgets, and major initiatives, as well as monitoring the company's financial performance, risk management, and compliance with applicable laws and regulations.
Ultimately, the relationship between the CEO and the board should be collaborative and constructive, with both parties working together to achieve the company's goals and objectives.
If a CEO starts ignoring the Board of Directors, it can create significant problems for shareholders. The Board of Directors is responsible for overseeing the company's management and making strategic decisions that affect the company's direction, including the selection and oversight of the CEO.
If the CEO is not working collaboratively with the Board of Directors, it can lead to a breakdown in communication and decision-making, which can result in poor performance and a decline in shareholder value. It can also lead to a lack of accountability, with the CEO making decisions that are not in the best interest of the company or its shareholders.
In extreme cases, a CEO who ignores the Board of Directors can lead to conflicts, lawsuits, and even a loss of confidence in the company by investors, which can result in a decline in the company's stock price.
Therefore, it is crucial for the CEO to work collaboratively with the Board of Directors and ensure that there is open communication and alignment on the company's strategy and goals. If there are differences of opinion, they should be addressed in a respectful and constructive manner to ensure that the company can make the best decisions for the benefit of all stakeholders, including shareholders.