I.
Board of Directors: Authority and Acts
Management of the regular business
affairs of the corporation is ordinarily invested in the board of
directors, the members of which are elected by the shareholders. The
day-to-day management of the corporation is then entrusted to the
officers, who are appointed, and can be removed at any time, by the
board of directors.
The board can be composed of inside and
outside directors. The listing standards for the NYSE and Nasdaq
require that the board be composed of a majority of independent
directors. The definition of independent director excludes anyone
with a material relationship with the company. In other words, they
can have no ties to company or management except for their service on
the board.
The Chief Executive Officer is usually
the chairman of the board. Sometimes the CFO and COO are also on the
board, but typically no more than two or three corporate officers
serve on the board.
After the Sarbanes-Oxley Act of 2002, a
board must have at least 3 committees, each composed exclusively of
independent directors:
- Audit
- Compensation
- Nominating and Governance
Fundamental corporate changes (such as
alteration of the capital structure, amendment of the articles of
incorporation, merger, or dissolution) require approval by the
shareholders, usually on the recommendation by the directors.
Shareholders have the power to adopt and amend the bylaws but often
delegate this power to the directors. In other areas, the
shareholders generally have very little direct power over the regular
affairs of the corporation.
Del. § 141(a) The business and affairs
of every corporation organized under this chapter shall be managed by
or under the direction of a board of directors, except as may be
otherwise provided in this chapter or in its certificate of
incorporation.
Del. § 141(b)- Every corporation must
have a board of directors consisting of at least 1 director.
Del. § 141(b)- The board can act only
at a meeting where a quorum of directors is present (majority of the
board unless otherwise specified in the articles or bylaws)
Del. § 141(e)- The board can act
without a meeting if all members of the board consent thereto in
writing.
Del. § 141(h)- Member of the board can
participate in a board meeting via conference telephone or other
communications equipment.
Del. § 141(d)- A member of the board
of directors shall, in the performance of such member's duties, be
fully protected in relying in good faith upon the records of the
corporation and upon such information, opinions, reports or
statements presented to the corporation by any of the corporation’s
officers or employees, or committees of the board of directors, or by
any other person as to matters the member reasonably believes are
within such other person’s professional or expert competence and
who has been selected with reasonable care by or on behalf of the
corporation.
Del. § 142(a)- Every corporation needs
at least 2 officers to sign shares of stock. Each one verifies the
identity of the other. One of the officers shall have the duty to
record the proceedings of the meetings of the stockholders and
directors in a book to be kept for that purpose. Any number of
offices may be held by the same person unless the certificate of
incorporation or bylaws otherwise provide.
Del. § 142(b)- Officers shall be
chosen in such manner and shall hold their offices for such terms as
are prescribed by the bylaws or determined by the board of directors
or other governing body. Any officer may resign at any time upon
written notice to the corporation.
---
Interested in learning how to get the top grades in your law school classes? Want to learn how to study smarter than your competition? Interested in transferring to a high ranked school?
No comments:
Post a Comment