Board of Director Minutes, Resolutions & More
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Who Does the Board of Directors Represent?
The role of board of directors is a highly important one because they are the executive board of a corporation that makes the major decisions regarding the way the business is run. Board members have the power to vote on important resolutions, as well as fundamental changes to the corporate bylaws and corporate charter. At a board of directors meeting, decisions may be made about ordinary business matters, such as authorizing a loan to the company or hiring a new corporate officer. Critical decisions, such as sales of company assets and mergers and acquisitions, are also decided at the board level.
More about Board of Directors
The board of directors owes a fiduciary duty to act in the best interest of the shareholders. In some cases, the shareholders can invoke a procedure to challenge an act of the chairman of the board or corporate board of directors.
Who are the Board of Directors?
The corporate board of directors may be appointed by the incorporators, or voted on by shareholders. The board of directors may or may not take a managerial role, in some cases they appoint others to fill officer positions such as CEO, President, Treasurer, etc. Those who don't take a management role are called outside directors, as opposed to inside directors who are employed by the company and take a managerial role. In large corporations, an outside director may also be called an independent director because of not being subject to a conflict of interest with the CEO of the company. Many independent board of directors positions are held by people who are highly esteemed in the community or have recognition in the business or academic arena. Board members of both a publicly held corporation and private corporation may receive compensation for their services.
What is the Role of Board of Directors and Its Duties?
Each board and its board of directors duties is different, but the following are the typical responsibilities of a board member:
- Attendance at a scheduled board of directors meeting. Meetings are typically required to be held at least annually. At the annual meeting, the board of directors will announce any dividend for the year, amend bylaws or the articles of incorporation as needed, hire or appoint new key employees and officers, and address other important issues that arise. Meeting minutes of a board of directors meeting are recorded in a minutes book. If any voting occurred, the results are noted in the meeting minutes.
- Select corporate executives.
- Vote on important corporate matters.
- Set corporate policies and objectives.