Business, Legal & Accounting Glossary
Person(s) appointed by shareholders of a limited liability company to manage the affairs of the company.
A member of the governing board of a corporation, typically elected at an annual meeting of the shareholders. Directors are responsible for making important business decisions — especially those that legally bind the corporation — leaving day-to-day management to officers and employees of the corporation. For example, a decision to borrow money, lease an office or buy real property would normally be authorized by the board of directors. However, in the small business world, where it is common for owners to be directors, officers and employees simultaneously, distinctions dividing the roles and responsibilities of these groups are often blurred.
Directors are elected by the shareholders. They manage or direct the affairs of a corporation. Typically, the directors make only major business decisions, major policy changes and monitor the activities of the officers. They are the people who primarily manage the corporation.
A senior-level management position.
n. a member of the governing board of a corporation or association elected or re-elected at annual meetings of the shareholders or members. As a group the directors are responsible for the policy-making, but not day-to-day operation, which is handled by officers and other managers. In some cases, a director may also be an officer, but need not be a shareholder. Most states require a minimum of three directors on corporate boards. Often lay people dealing with corporations confuse directors with officers. Officers are employees hired by the board of directors to manage the business.
A director is one of a group of individuals elected by a company’s shareholders to represent their interests and provide guidance and advice to the corporate CEO. The role of the director (as part of a board of directors) is to select and evaluate the CEO, review and establish corporate strategy, make decisions regarding dividends and other shareholder issues and oversee regulatory compliance. A director can be an inside director employed by or affiliated with the company or an independent director with no prior affiliation. Generally, a director serves a two- or three-year term after which he/she must be re-elected by shareholders. A director is expected to attend quarterly board meetings and to serve on one or more board committees.
In the US, The Sarbanes-Oxley Act of 2002 requires that every director who serves on the audit committee must be an independent director.
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This glossary post was last updated: 27th April, 2020 | 514 Views.