What the board actually does — six operating responsibilities the statute delegates and the law polices.

1. CEO selection, oversight, and removal

The DGCL commits day-to-day management to officers appointed by the board¹ and authorizes the board to remove them with or without cause.² Officers owe the same fiduciary duties of care and loyalty as directors.³ The board’s hiring, evaluation, and removal of the CEO are themselves fiduciary acts — reviewable under the business-judgment rule when the board is disinterested and reasonably informed,⁴ and under entire fairness when a controller is on the other side.⁵ The NYSE and Nasdaq listing standards require that non-management directors meet in regular executive session without the CEO present,⁶ and that boards adopt and disclose corporate-governance guidelines covering an annual board evaluation.⁷

2. Executive compensation, clawback, and succession

Executive pay sits at a federal-state seam. Substantive authority sits with the board (or its compensation committee) under DGCL § 122(15) and § 157,⁸ but disclosure, voting, and recovery are federal. Item 402 of Regulation S-K requires Compensation Discussion & Analysis and the Summary Compensation Table.⁹ Dodd-Frank § 951 mandates a non-binding say-on-pay vote at least once every three years;¹⁰ § 953(b) requires CEO pay-ratio disclosure;¹¹ § 954, implemented by SEC Rule 10D-1, requires recovery of incentive compensation paid on the basis of erroneously reported financial information.¹² The compensation committee must be composed of independent directors under SEC Rule 10C-1, with heightened independence factors for any compensation consultant it retains.¹³ Succession planning is not separately mandated by statute, but the Court of Chancery treats it as part of the board’s Caremark oversight where the absence of a credible succession plan would itself be a mission-critical failure.¹⁴

3. Approval of corporate purpose, strategy, plans, and budgets

The board’s authority over corporate strategy flows from DGCL § 141(a) and TBOC § 21.401 and is exercised under the business-judgment rule absent a disabling conflict. On an ordinary day, directors of a for-profit corporation may consider stakeholders so long as the consideration is rationally tied to long-term stockholder welfare; in Revlon mode — sale of control or breakup — that latitude narrows to seeking the best transaction reasonably available.¹⁵ Mergers, charter amendments, asset sales, and dissolution additionally require a stockholder vote;¹⁶ the board must satisfy itself that any such transaction is properly submitted and that its own informational and procedural posture supports the recommendation.¹⁷

4. Oversight of financial reporting and internal controls

Sarbanes-Oxley § 302 requires the CEO and CFO to certify each periodic report;¹⁸ § 404 requires management to assess, and the external auditor to audit, the issuer’s internal control over financial reporting (ICFR).¹⁹ The PCAOB’s Auditing Standard 2201 governs the ICFR audit;²⁰ AS 1301 governs the auditor’s required communications with the audit committee.²¹ SEC Rule 10A-3 requires that the audit committee be composed entirely of independent directors and be directly responsible for the appointment, compensation, retention, and oversight of the external auditor.²² Item 407(d)(5) of Regulation S-K requires that at least one audit-committee member be disclosed as an SEC-defined “audit committee financial expert” or that the issuer disclose why not.²³

5. Oversight of capital structure and capital allocation

Stock issuance, repurchases, and dividends are statutory board decisions. DGCL §§ 151–153 govern share authorization; § 160 governs the corporation’s purchase of its own shares; § 170 limits dividends to surplus or net profits.²⁴ Capital-allocation decisions are reviewed under the business-judgment rule when the board is disinterested, but heightened review applies when a controller is differentially affected — as in In re Trados Inc. S’holder Litig., where the Court of Chancery applied entire fairness to a transaction that paid common stockholders nothing while satisfying the controlling preferred holders’ liquidation preferences.²⁵

6. Oversight of risk — the Caremark perimeter

The doctrinal foundation is the four-case trajectory developed in the preceding callout: Caremark created the board-level monitoring duty;²⁶ Stone v. Ritter set bad faith as the liability standard;²⁷ Marchand v. Barnhill revived the doctrine for mission-critical risk;²⁸ and In re McDonald’s extended it to officers within their areas of responsibility.²⁹ Cybersecurity is now an enumerated disclosure topic: Regulation S-K Item 106, effective September 5, 2023, requires issuers to describe board oversight of cybersecurity risk and the management positions and committees responsible.³⁰ Form 8-K Item 1.05 requires four-business-day disclosure of any material cybersecurity incident.³¹