Duties Of Corporate People

764 Words4 Pages
Duties of Corporate People Every person in a corporation has certain duties that they perform. Some of these people have duties that are critical to the corporate process. These people are directors, officers and shareholders. The duties that each of these people performs are crucial to the corporation. This paper will discuss what these people’s duties entail and how they differ from a public company to a close company. The main duty of the board of directors is to manage the corporation. In a public company this is virtually impossible because of other duties the board members have. Therefore the board of directors delegates out the responsibility of managing to members of committees. These members manage under the direction of the board and carry out the responsibilities of the board in making sure the corporation is run properly. Larger publicly held corporations have committees of the board. The committees of the board can make certain decisions but there are decisions that require the board approval. The Model Business Corporation Act (MCBA) regulates what decisions require board approval. According to Mallor, Barnes, Bowers, and Langvart (2010), the powers that may not be delegated to committees are “declaring dividends, filling vacancies of the board or its committees, adopting and amending bylaws, approving issuances of shares, and approving repurchases of the corporation’s shares” (p. 1049). The board of directors is elected by the shareholders. Anyone can be a member of the board; it does not have to be a shareholder. There are different laws in each state as to how many members there must be on the board of directors. According to the Corporate Director’s Guidebook-Sixth Edition (2011) “directors have the responsibility to act in the best interests of the corporation and its shareholders” (p. 977). In doing this the directors

More about Duties Of Corporate People

Open Document