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 ?
Ond doedd dim rhyddhad o weld bod agwedd cibddall pobl uniaith Saesneg dal i fod mor amlwg.
As the main goal of this research was to find a suitable BOD sensor for measurements in phenolic wastewaters, it was necessary to test the sensors in a medium that contains phenolic compounds.
If any members have comments or are interested in working with the BOD on any of the topics discussed here, please do not hesitate to contact a member of the BOD.
He asked for and received a sensing of the BOD on several key provisions.
Even with filtration and recycling of liquids, however, the problem with BOD in wastes remained, albeit concentrated.
Under CIV management, the bank has achieved considerable growth taking advantage of the strong franchise of BOD and the expansion plan of its parent.
Honnwyd bod y cwmni wedi perfformio ar draws y byd, a'u bod newydd ddychwelyd o Moscow.
Chairman BoD said that Board will extend its cooperation to Pesco to achieve the given targets.
The meeting hailed the efforts of Chairman BoD Malik Mohammad Asad Khan for curtailing the expenditure and saving of billion of rupees of PESCO.
Company Secretary presented Minutes of 105th BOD meeting which were approved after detailed discussion.
Boed yn briodas, yn barti pen-blwydd, yn wledd arbennig neu'n de angladd, mae Gwesty Parc y Stradey wedi bod yn ganolbwynt i gymuned Llanelli ac yn gyrchfan poblogaidd i dwristiaid ers blynyddoedd.
As Times of Oman reported earlier, the principal was forced to submit his resignation after the BoD charged him with "manipulating" the election of prefects and authorising the printing of Swami Vivekananda's picture on the school calendar, which the BoD claims had hurt the school's secular credentials.