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The exercise by the board of directors of its powers usually occurs in board meetings. Most legal systems require sufficient notice to be given to all directors of these meetings, and that a quorum must be present before any business may be conducted. Usually, a meeting which is held without notice having been given is still valid if all of the ...
Directors' duties are a series of statutory, common law and equitable obligations owed primarily by members of the board of directors to the corporation that employs them. It is a central part of corporate law and corporate governance. Directors' duties are analogous to duties owed by trustees to beneficiaries, and by agents to principals.
In later years, Berle said squarely that the law had changed, and his original theory that the law required directors to pursue shareholder profit was now completely reversed by 1954, so that the contention that directors' exercise of corporate "powers were held in trust for the entire community". [11]
Board decisions should predominantly be policy decisions. Board should formulate policy by determining the broadest values before progressing to more narrow ones. A board should define and delegate, rather than react and ratify. Ends determination is the pivotal duty of governance. The board's best control over staff means is to limit, not ...
While older corporate law judgments suggested directors had to promote "shareholder value", most modern state laws empower directors to exercise their own "business judgment" in the way they balance the claims of shareholders, employees, and other stakeholders.
The articles of association of JKX provided that the company had power to issue a disclosure notice calling for information about persons interested in its shares, and empowering the board to restrict the exercise of rights attaching to shares in the event of non-compliance.
In the two-tiered board, the executive board, made up of company executives, generally runs day-to-day operations while the supervisory board, made up entirely of non-executive directors who represent shareholders and employees, hires and fires the members of the executive board, determines their compensation, and reviews major business decisions.
Since the board of directors habitually possesses the power to manage the business under a company constitution, a central theme is what mechanisms exist to ensure directors' accountability. UK law is "shareholder friendly" in that shareholders, to the exclusion of employees, typically exercise sole voting rights in the general meeting. The ...