Director Responsibilities
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Director Responsibilities
Corporate Directors
Subject to any restrictions imposed by the corporate charter or bylaws, the right and responsibility to determine policy and conduct the business of the corporation lies with the board of directors. The number of those who make up the board is usually set by the bylaws of the corporation. Bylaws are drawn up and adopted at the first meeting of the stockholders. The directors are elected by the stockholders and are ultimately responsible to the stockholders. Stockholders have the power to remove directors, either for cause or without cause, when the charter of incorporation or the bylaws so authorize and at any special meeting of the stockholders called for that purpose. Directors are usually elected annually at the annual meeting of stockholders.
It is important to remember that stockholders actually vote their shares of stock. Thus, if there are three stockholders but one owns 80% of the shares of stock, that stockholder will control the vote based on the amount of stock ownership.
Note the difference between a corporation's charter and its bylaws. If any restrictions imposed on the general powers of the directors are contained in the corporation's charter, third persons are bound by them, since the charter is considered a public record...