Board of Directors

Also found in: Dictionary, Thesaurus, Medical, Financial, Acronyms, Encyclopedia, 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 ?
Management reported its findings to the Audit Committee and the full Board of Directors.
ATS President Mark Chatterji said he regretted that the EPL Board of Directors has chosen to act in a manner which he believed was not in the best interests of its stockholders.
Two days later, the Board of Directors called a meeting, where Judge Bolin spoke on a point of personal privilege.
Past: CalCPA Board of Directors, vice chair; CalCPA Human Resources Committee; CalCPA Nominations and Leadership Development Committee; San Francisco Chapter Board of Directors; San Francisco Chapter president, first vice president, second vice president, treasurer.
So why should her own clinic hold her and the board of directors responsible for billing irregularities that led to a government investigation of the clinic?
The Board of Directors shall determine the membership year for all membership categories.
Recommend to the Board of Directors the outside auditor to be appointed by the Board and the fee to be paid to the outside auditor.
2d 530, which held that a decision of the board of directors of a cooperative may not be reviewed by a court unless it was made in bad faith or was discriminatory.
The National Rehabilitation Association Board of Directors establishes working committees to conduct concentrated study and perform work as needed.
PCG AM's management will report directly to its Board of Directors, which will include Mr.
Past: CalCPA Board of Directors, vice chair; CalCPA Communications Advisory Committee, chair; Orange County/Long Beach Chapter, president; California CPA Education Foundation Board of Trustees, president; AICPA Council.

Full browser ?