The Board of Directors
A board of directors – also known as an executive board, a board of managers, or simply “the board”
– is a group of people elected to manage the day-to-day running of a company, and make the long-term
decisions that affect the company's future viability and productivity. Depending on the type of business
model the company follows, the board may either be selected and appointed by the owner of the company,
or elected by the shareholders, in the case of a publicly traded corporation.
The powers and duties held by the board are determined by the organizing bylaws of the corporation,
which spell out the rules under which the business operates. Normally, these bylaws also detail the
number of board members, how the board members are chosen, and how and when they meet.
Although the responsibilities and duties of the board naturally depend on what the company does (the
responsibilities of the boards of, say, Microsoft and the Red Cross are, understandably, quite different),
they generally conform to a few standard guidelines:
- Providing leadership for the company by setting policies and objectives
- Selecting the chief executive, and evaluating his or her performance
- Approving the budget
- Representing the stockholders
The legal obligations of the board also depend on the type of company they represent. Large corporations
naturally have more legal responsibilities than smaller, more local companies.
Contact Us
If you'd like more information about establishing a board of directors, or understanding the responsibilities
of the board, contact Texas Legal Entities at 512-472-2431.
At any time, please feel free to ask us a question. It's FREE!