boards of directors

Examples of boards of directors in the following topics:

• Voting Right

  • Common stock can also be referred to as a "voting share. " Common stock usually carries with it the right to vote on business entity matters, such as electing the board of directors, establishing corporate objectives and policy, and stock splits.
  • In many cases, the shareholder will be able to vote for members of a company board of directors and, in general, each share gets a vote as opposed to each shareholder.
  • Many of the voting rights of a shareholder can be exercised at annual general body meetings of companies.
  • An AGM is held every year to elect the board of directors and inform their members of previous and future activities.
  • This scene from "The Office" humorously illustrates a shareholder meeting, where the shareholder can exercise their right to vote on company issues or question company directors.

• Committees

  • For example of the later case, the Board of directors can frequently enter into binding contracts and make decisions which once taken or made, can't be taken back or undone under the law.
  • Where there is a large committee, it is common to have smaller committees with more specialized functions - for example, Boards of Directors of large corporations typically have an (ongoing) audit committee, finance committee, compensation committee, etc.
  • For example, an organization considering a major capital investment might create a temporary working committee of several people to review options and make recommendations to upper management or the Board of Directors.
  • For an example of the latter case, the Board of directors can frequently enter into binding contracts and make decisions which, once taken or made, can't be taken back or undone under the law.
  • For example, an organization considering a major capital investment might create a temporary working committee of several people to review options and make recommendations to upper management or the Board of Directors.

• Ownership of Corporations

  • By acquiring a controlling interest in the company, a person could suggest product changes in board of directors committee meetings, and the company's executives could choose to make those changes.
  • If they did not, they could be fired by board members with the majority of votes.
  • A single committee or board of directors is the method favored in most common law countries.
  • The board of directors is composed of both executive and non-executive directors.
  • Under this model, the executive directors sit on one committee while the non-executive directors sit on the other.

• Working with Management

  • Nonprofit management has the additional task of keeping the faith of donors.
  • In most models of management and governance, shareholders vote for the board of directors, and the board then hires senior management.
  • Senior management is generally a team of individuals at the highest level of organizational management who have the day-to-day responsibility of managing a company.
  • They hold specific executive powers conferred onto them by the board of directors and or the shareholders.
  • There are most often higher levels of responsibility, such as a board of directors and those who own the company (shareholders), but they focus on managing the senior management instead of the day-to-day activities of the business.

• Types of Stakeholders

  • The board of directors are considered primary stakeholders with substantial power in the life of an organization.
  • The board is a body of elected or appointed members who jointly oversee the activities of a company or organization.
  • In a stock corporation, the board is elected by the shareholders and is the highest authority in the management of the corporation.
  • In an organization with voting members, the board acts on behalf of, and is subordinate to, the organization's full group, which usually chooses the members of the board.
  • The legal responsibilities of board members vary with the nature of the organization and with the jurisdiction within which the organization operates.

• Corporations

  • Because shareholders generally cannot know and manage the full details of a corporation's business, they elect a board of directors to make broad corporate policy.
  • Typically, even members of a corporation's board of directors and managers own less than 5 percent of the common stock, though some may own far more than that.
  • Usually, only a minority of board members are operating officers of the corporation.
  • Some directors are nominated by the company to give prestige to the board, others to provide certain skills or to represent lending institutions.
  • As long as a CEO has the confidence of the board of directors, he or she generally is permitted a great deal of freedom in running a corporation.

• Defining Corporate Governance

  • Internal stakeholders are the board of directors, executives, and other employees .
  • Rather than overseeing management on behalf of shareholders, the board of directors may become insulated from shareholders and beholden to management.
  • Organizations should develop a code of conduct for their directors and executives that promotes ethical and responsible decision making.
  • Organizations should clarify and make publicly known the roles and responsibilities of board and management to provide stakeholders with a level of accountability.
  • Corporate governance principles and codes have been developed in different countries and issued from stock exchanges, corporations, institutional investors, or associations (institutes) of directors and managers with the support of governments and international organizations.

• The Federal Reserve System's Structure

  • Board of Governors, which holds the power at the Fed, appoints the last three directors.
  • In turn, the nine directors elect the president of the Fed district bank.
  • A Fed bank does not operate like a corporation where the stockholders can freely elect the board of directors, who vote on the major corporate policies.
  • Second, the terms of the board members are staggered.
  • Chairperson of the Board of Governors is also chairperson of the FOMC.

• Answers to Chapter 13 Questions

  • Furthermore, the Board of Governors can choose three directors and approves the choice of the Fed's bank president.
  • Finally, businesses can elect the last three directors.
  • The Board of Governors manages the Federal Reserve System.
  • Moreover, the members of the Board of Governors have staggered terms, so one President cannot change the entire board at once.
  • They determine open-market operations, while the Board of Governors controls the FOMC.

• Banking Crises and Centralized Reserve Enforcements

  • The Federal Reserve supervises certain entities and has the statutory authority to take formal enforcement actions against them, including state member banks, bank holding companies, nonbank subsidiaries of bank holding companies, branches and agencies of foreign banking organizations operating in the United States and their parent banks, and officers, directors, employees, and certain other categories of individuals associated with the above banks, companies, and organizations.
  • Typically, such findings are communicated to the management and directors of a banking organization in a written report.
  • Most problems are resolved promptly after they are brought to the attention of an institution's management and directors.
  • In some situations, however, the Federal Reserve may need to take an informal supervisory action, requesting that an institution adopt a board resolution or agree to the provisions of a memorandum of understanding to address the problem.
  • If necessary, the Federal Reserve may take formal enforcement actions to compel the management and directors of a troubled banking organization, or persons associated with it, to address the organization's problems.