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 ?
CONTACT: Leah Short of Corporate Board Member, +1-615-309-3200, lshort@boardmember.
This year, we welcome back some familiar names and congratulate all the organizations selected as a top corporate law firm by directors and their general counsel," said TK Kerstetter, President of Corporate Board Member.
In addition to naming the top 20 corporate law firms nationally, Corporate Board Member/FTI Consulting's legal study identifies the top five law firms in 25 major U.
Risks and legal matters are intrinsic to the boardroom discussions of today's public companies," stated TK Kerstetter, president of Corporate Board Member.
Today technology and IT are key business strategies and typically are accompanied by capital budgets reaching as high as a billion dollars in larger companies," said TK Kerstetter, president and CEO of Corporate Board Member.
The 2006 Director and General Counsel Study findings were highlighted in Corporate Board Member's July/August issue.
Special note: Directors and selected officers who companies participate in the Corporate Board Member/NYSE Board Education Program will have unlimited access to all live webinars and will have exclusive access to the series on-demand, in addition to a wide range of educational opportunities, at no additional charge.
Rukeyser, editorial director of Corporate Board Member, "Law firms especially value our rankings because they come not from their peers -- other lawyers -- but from the corporate officers, directors and in-house attorneys who hire law firms and pay their bills.
Contacts: Jamie Tassa Corporate Board Member 615-309-3200 jtassa@boardmember.
Corporate Board Member and FTI Consulting conducted the research for these rankings between February and April of this year.
The Symposium also marked the launch of the Women's Forum Corporate Board Initiative Database, a repository of board - qualified women which qualified companies can access to increase gender parity on their boards.
I worry that if more companies don't embrace this inevitable social change of having company workforces and boards more closely resemble the markets and customers they serve, then we're likely to see increased pressure for a mandated change," said TK Kerstetter, president of Corporate Board Member, an information and education resource for senior officers and directors of publicly traded corporations.

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