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 ?
The company's Board of Managers adopted and approved the 2009 Omnibus Incentive Compensation Plan ("Omnibus Plan") on April 28, 2009.
At the Annual Meeting, members reelected Rodney Hebrink and Paul Wilson to the board of managers for three-year terms.
He previously served from 2003 to 2005 on the board of managers of White Cap Trading, L.
Scozzafava and Patrick Thornton will be placed on GS Fulton Biodiesel's board of managers.
Besides his roles as president of Brookhill and chairman of the board of managers of Dames & Moore/Brookhill, Bruder heads a medical technology company called Gynetech Laboratories, Ltd.
Today is a significant moment for all those involved in making this dream a reality," said Vincenzo Caiazzo, chairman of the board of managers for Global Aeronautica.
In addition to a new look and format, the form will require the Board of Managers to furnish greater detail regarding the description, use and occupancy of the entire condominium.
He also served on the University of Virginia Board of Managers (president) and Darden School (chairman).
The condo is ruled by a Board of Managers, also through by-laws, but most often, the guidelines are much simpler and less restrictive than those penned for coops.
Allen has contributed significantly to the firm in many ways, including as a member of Crowe's Strategic Alliance Committee, including serving as chairman; a member of the board of managers of Crowe Capital Markets and Crowe Wealth Management (Crowe Group entities); a member of the Executive Committee of Horwath Castillo Miranday Compania, S.
About one year later, the Condominium's attorney requested that Albert pay her rent directly to the Condominium's board of managers instead of her landlord Summer by virtue of the provisions of General Business Law Section 352-e(2-d).
Canney was elected as a member of the board of managers of Rio Vista GP LLC, a subsidiary of Penn Octane, and serves as chairman of that board.

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