board of directors

In the context of a corporation a board of directors is a group of people, selected by the shareholders , who make the major decisions for the company. The exact responsibilities of the board are governed by the company’s articles of incorporation . That said, the board is generally responsible for choosing the corporate officers , selling shares of the company, distributing dividends , and responding to merger and takeover offers. The board has a fiduciary duty to act in the best interest of the shareholders. Additionally, every public corporation is legally required to elect a board of directors. Private companies are not under the same obligation ; however, they also tend to elect a board.

[Last reviewed in June of 2022 by the Wex Definitions Team ]

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