Historically, the power to manage the business of all companies and corporations was conferred upon the board of directors. The fact that it was impossible for a board of directors to manage the day-to-day business of large public corporations was only openly acknowledged in the past three decades. This chapter focuses on the organs of a company and then discusses the main functions of a board of directors. It is clear that there is an important distinction between managing the business of the company and directing, supervising and overseeing the management of the business of corporations in large public companies. The board is responsible for directing, supervising and overseeing the management of the business of corporations. Managing the business of large public corporations is normally left to management, but under control of the board.

In this chapter it is argued that a significant part of the reason for private equity’s outperformance is its superior and sophisticated governance structures, as described in this book, with lessons for private equity practitioners, investors and policymakers, as well as academics and others with a general interest in corporate governance and corporate performance.