Board of Directors

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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 ?
Guido Dierick, NXP Semiconductor legal counsel, will serve as secretary to the Board of Management.
Marijn Dekkers, Chairman of the Board of Management of Bayer AG.
The new Chairman of the Board of Management of DaimlerChrysler Services AG will be Juergen Walker (54), who previously headed DaimlerChrysler Services North America.
The number of stock options available for ASML employee stock option arrangements and authorization of the Board of Management to issue stock options to ASML employees pursuant to these arrangements.
Authorization of the Board of Management, for an 18 month period, to purchase, subject to the approval of the Supervisory Board, fully paid up shares in the capital of the Company for a per share consideration of (1) not less than the nominal value of these shares and (2) not more than twice the highest stock exchange rate quoted on the Bourse de Paris in the 30 day period preceeding the date on which the shares are purchased by the Company, and not exceeding 0.
He was appointed Managing Director of Porsche Consulting in 1994 and became the member of the Board of Management of Porsche AG in charge of Production and Logistics in 1998.
The decision has no effect on the 2005 profit outlook already issued by the Group Board of Management: the Board of Management continues to expect a year- on-year improvement in both operating profit after special items and profit before tax.
He will be appointed to the Board of Management of Bayer AG effective September 1, 2014.
Fehrenbach joined Bosch in 1975 and has been a member of the board of management since 1999.
At the Annual General Meeting of Deutsche Post AG held in the Jahrhunderthalle in Frankfurt-Hochst, Germany, around 1,000 shareholders approved the resolutions proposed by the Board of Management and the Supervisory Board by large majorities.
MUNICH, Germany -- Professor Joachim Milberg (58) has requested the Supervisory Board of BMW AG in their meeting on 4 December 2001 to relieve him from his office as the Chairman of the Board of Management upon expiry of the Annual General Meeting on 16 May 2002.

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