Board of Directors

(redirected from Board members)
Also found in: Dictionary, Thesaurus, Financial, Wikipedia.

Board of Directors

A group of people comprising the governing body of a corporation.

The shareholders of a corporation hold an election to choose people who have been nominated to direct or manage the corporation as a board. In the past nearly all states required that at least three directors run a corporation. The laws have changed, however, since many corporations have only one or two shareholders and therefore require only one or two directors to serve on the board.

Directors are elected at the first annual meeting of shareholders and at each successive annual meeting for one-year terms, unless they are divided into classes. In a corporation that divides its directors into classes, called a classified board, conditions are often imposed concerning the minimum size of the board, the minimum number of directors to be elected annually, and the maximum number of classes or maximum terms. The purpose of a classified board, which is expressly permitted by most statutes, is to make takeover attempts more difficult by staggering the terms of the directors.

Removal of a director during the course of his or her term may occur for cause by shareholders or by the board itself if there is a provision in the bylaws or articles of incorporation that confers such power upon them. The removal of a director for cause is reviewable by a court. Many jurisdictions have put into effect statutes that concern the removal of directors with or without cause.

The functions of directors involve a fiduciary duty to the corporation. Directors are in control of others' property and their powers are derived primarily from statute.

Directors are responsible for determining and executing corporate policy. For example, they make decisions regarding supervision of the entire enterprise and regarding products and services.

Liabilities of directors extend to both their individual and joint actions. A director who commits a tort against his or her corporation can be held personally liable.

Directors are bound by certain duties such as the duty to act within the scope of their authority and to exercise due care in the performance of their corporate tasks.

board of directors

n. the policy managers of a corporation or organization elected by the shareholders or members. The Board in turn chooses the officers of the corporation, sets basic policy, and is responsible to the shareholders. In small corporations there are usually only three directors. In larger corporations board members provide illustrious names, but the company is often run by the officers and middle-management who have the expertise. (See: corporation)

See: management, supervision
References in periodicals archive ?
The problems led three board members to resign in late July.
But the self-professed conservatism of school board members does not mean they agree with most of the goals of the right wing.
On April 23, 1971 while serving as JPD Board Member at Large, Fairbairn died in an automobile accident.
Board members, and librarians for that matter, are not sure which decisions are policy and which are considered management.
However, when boards are formed in this manner, board members may be perceived as tame--representing the established viewpoints of the official who appointed them.
In a recent survey of local United Way affiliates, the Not For Profit Leadership Project at Baruch College discovered that only a third of the nonprofits' executive officers believed that their board members fully understood the mission of their particular organization.
Remuneration of the Board of Directors was set at SEK 2M and will be distributed between the Board Members according to the following structure: The Chairman SEK 500,000, the other Members elected by the Annual Meeting of shareholders 200,000 each and SEK 300,000 for committee work.
Some boards technically close monthly meetings to non-members, but most board members will appreciate your interest and will remember it when a board seat opens.
While some board members said that starting meetings late wastes time of highly paid administrators on waiting, board member Julie Korenstein questioned whether the board would be able to start meetings on time.
To discharge its duty of care, a board will generally avoid being second-guessed by a court if the board members follow the so-called "business judgment rule"--that is, they follow a process that is deliberate and thoughtful and in which they ask the right questions.
Nathanson and others involved in a state coalition of student board members are helping students new to the process by developing a handbook for future student reps.
While working at Corning and serving on the board of the Corning Hospital, Kaiser worked with high-level executives who were also board members, including his division manager.