In a company, the board of directors and the management both help run the business, but they operate at different levels and have different responsibilities. Confusing the two can blur accountability. Here is a plain-English guide for England and Wales.
Two levels of running a company
- The board of directors is responsible for the company's direction, strategy and oversight, the "big picture" and ultimate accountability.
- The management (the executive team and managers) is responsible for the day-to-day operations, implementing the strategy and running the business.
Think of it as: the board steers, the management drives.
What the board does
The board, acting collectively, typically:
- sets the company's strategy and objectives;
- oversees and monitors performance and management;
- makes major decisions (significant investments, financing, key appointments);
- ensures good governance, risk management and legal compliance; and
- is accountable to the shareholders.
Directors owe statutory duties to the company under the Companies Act 2006 (ss 171–177) (including to promote the company's success, exercise care and skill, and avoid conflicts) and can be personally liable for breaches.
What management does
Management (led by executives such as a CEO/managing director and functional managers) handles the operational running of the business:
- implementing the board's strategy;
- managing staff, sales, production, finance and customers day to day;
- making operational decisions within delegated authority; and
- reporting to the board.
Managers are usually employees; their authority comes from delegation by the board.
How they overlap (and differ)
- Executive directors sit on both sides, they are board members and part of senior management (e.g. the CEO who is also a director).
- Non-executive directors are on the board but not part of day-to-day management, they bring independent oversight and challenge.
- In small companies, the same individuals are often directors and managers (and shareholders), but the roles remain legally distinct.
The board delegates operational management to executives/managers but retains ultimate responsibility and oversight, it cannot simply hand off its legal duties.
Why the distinction matters
- Accountability: the board is accountable to shareholders and carries statutory duties; managers are accountable to the board.
- Authority: management acts within delegated limits, significant matters are reserved to the board (and some to shareholders).
- Governance: keeping strategy/oversight (board) separate from execution (management) supports better decisions and controls.
Key takeaways
- The board of directors sets strategy and provides oversight; management runs day-to-day operations within delegated authority.
- Directors owe statutory duties (Companies Act 2006, ss 171–177) and are accountable to shareholders; managers are employees accountable to the board.
- Executive directors bridge both roles; non-executive directors provide independent oversight only.
- The board delegates operations but retains ultimate responsibility, it cannot delegate away its legal duties.
Sources
- Companies Act 2006 (directors' general duties, ss 171–177; the board's role and powers under the articles)
- The company's articles of association (delegation of authority to management/executives)
- UK corporate governance principles on the board's role versus executive management
--- This article is general information about the law of England & Wales as at 2026, not legal advice. For advice on your circumstances, consult a qualified solicitor.