Duhaime's Law Dictionary


Board of Directors Definition:

The group of most senior managers, operators and administrators of a corporation or association.
Subject only to any limitations set out in the relevant incorporation statute of the jurisdiction which certified the corporate entity, the articles or constitutional documents of the entity or, in the case of a corporation, any shareholders agreement, there is no limit as to the type of decision a board of directors can take.

Annually, or upon such other similar intermittent period, the shareholders elect the membership to the board of directors, incumbents called thereafter and for their tenure, directors, but thereafter it is this board, the directors acting as a group, that manage the affairs of the corporate entity.

Some of the better-known decisions a board of directors generally takes:
  • Employment and supervision of officers and independent contractors;
  • Contracts of employment with general employees including, if applicable, the negotiation of any collective bargaining agreement;
  • Approval of major contracts;
  • Supervision and approval of the financial statements and affairs of the corporate entity;
  • Decision as to major purchases and on the distribution of net profits in the form of dividends;
  • Major decisions concerning the management of litigation in which the corporate entity is an interested party; and
  • The preservation of the corporate entity's assets including, but not limited to, the purchase of adequate and appropriate insurance.

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