Board of Directors
Definition: A board of directors governs a corporation. It is a group of people who are elected by a company's shareholders to meet periodically to oversee the company's management and represent the interests of the shareholders. The board has overall authority for decisions made by the company, but usually confines itself to the following areas:
- Issuance of stock
- Issuance of dividends
- Naming members to various committees
- Adopting and revising bylaws
- Hiring or firing senior managers and setting their compensation
- Setting the company's overall direction
The board of directors may be comprised of senior managers of the company, as well as outsiders with special skills that can be of assistance to the company.
A board may have several committees that deal with specialized areas of concern. For example, there may be an audit committee, compensation committee, governance committee, and risk management committee.