Board of Directors
The board of directors is the controlling body of a corporation that makes major corporate decisions and elects the officers. It usually meets just once a year. In most states, a corporation can have one director (who can also hold all offices and own all the stock). In a small corporation, the board members are usually also officers.
The board of directors usually meets just once a year. Examples of procedures which must be approved by the board of directors include:
- Declaring a dividend
- Electing officers and setting the terms of their employment
- Amending bylaws or the articles of incorporation
- Any corporate mergers, reorganizations or other significant corporate transactions
Directors of a corporation owe "duties of loyalty and care" to the corporation. Generally, this means the directors must act in good faith, with reasonable care, and in the best interest of the corporation. If a director stands to personally gain from a transaction with the corporation, he or she must disclose this fact and refrain from voting on the matter, if possible.