Board Of Directors

Board of directors
From Wikipedia, the free encyclopedia
For other uses of "trustee", "trusty", and related terms, see Trustee (disambiguation)."Board Room" redirects here. For the "Board Room" member lounge, see Alaska Airlines.
A board of directors is a body of elected or appointed members who jointly oversee the activities of a company or organization. Other names include board ofgovernors, board of managers,board of regents, board of trustees, and board of visitors. It is often simply referred to as "the board".
A board's activities are determined by the powers, duties, and responsibilities delegated to it or conferred on it by an authority outside itself. These matters are typically detailed in the organization's bylaws. The bylaws commonly also specify the number of members ofthe board, how they are to be chosen, and when they are to meet.
In an organization with voting members, e.g., a professional society, the board acts on behalf of, and is subordinate to, the organization's full assembly, which usually chooses the members of the board. In a stock corporation, the board is elected by the stockholders and is the highest authority in the management of thecorporation. In a non-stock corporation with no general voting membership, e.g., a university, the board is the supreme governing body of the institution;[1] its members are sometimes chosen by the board itself.
Typical duties of boards of directors include:[4][5]
 governing the organization by establishing broad policies and objectives;
 selecting, appointing, supporting and reviewing the performanceof the chief executive;
 ensuring the availability of adequate financial resources;
 approving annual budgets;
 accounting to the stakeholders for the organization's performance;
 setting the salaries and compensation of company management.
The legal responsibilities of boards and board members vary with the nature of the organization, and with the jurisdiction within which it operates.For public corporations, these responsibilities are typically much more rigorous and complex than for those of other types.
Typically the board chooses one of its members to be the chairman, who holds whatever title is specified in the bylaws.
Directors
The directors of an organization are the persons who are members of its board. Several specific terms categorize directors by the presence orabsence of their other relationships to the organization.[6]
An inside director is a director who is also an employee, officer, major shareholder, or someone similarly connected to the organization. Inside directors represent the interests of the entity'sstakeholders, and often have special knowledge of its inner workings, its financial or market position, and so on.
Typical inside directors are: A Chief Executive Officer (CEO) who may also be Chairman of the Board
 Other executives of the organization, such as its Chief Financial Officer (CFO) or Executive Vice President
 Large shareholders (who may or may not also be employees or officers)
 Representatives of other stakeholders such as labor unions, major lenders, or members of the community in which the organization is locatedAn inside director who is employed as a manager or executive of the organization is sometimes referred to as an executive director (not to be confused with the title executive directorsometimes used for the CEO position). Executive directors often have a specified area of responsibility in the organization, such as finance, marketing, human resources, or production.
An outside director is amember of the board who is not otherwise employed by or engaged with the organization, and does not represent any of its stakeholders. A typical example is a director who is president of a firm in a different industry.
Outside directors bring outside experience and perspective to the board. They keep a watchful eye on the inside directors and on the way the organization is run. Outside directors...