BOARD OF DIRECTORS

Abstract

The corporate board of directors is a body entrusted with power to make economic decisions affecting the well‐being of investors' capital, employees' security, communities' economic health, and executives’ power and perquisites. The power of the board of directors is often forgotten in this complex society. Managers, the government, and special interest groups seem to impose upon the corporation situations that are never addressed by the board of directors. Yet it is the board that has the ultimate internal authority within the corporation. Corporate charters granted by the various states specifically assign to the board of directors the responsibility of management, or the delegation of that management. The directors act as trustees for the shareholders, selecting the management structure of the firm, and delegating to that management structure those administrative matters the board itself chooses. The degree of delegation is a decision of each board, with most boards delegating away the major portion of their decision‐making authority.