Compare the respective roles of the officers, board of directors, and the shareholders of a corporation. Who runs the corporation? Explain your answer and give examples

Answer 1

The officers of a corporation handle the day-to-day business affairs of the company. They are considered agents of the corporation, and are selected by the board of directors. Because of this, officers answer to the board of directors rather than directly to the shareholders. The board of directors sets the broad guidelines by which a corporation operates. They are responsible for making decisions about overall policy. Directors declare dividends, authorize major corporate contracts, appoint or remove officers and set salaries, and issue authorized shares of stock. Directors are obligated to be honest and loyal in their actions. Though individual directors aren't agents of the corporation, when they act as a unit (board), they are. Shareholders own the corporation. The only ways, however, shareholders can exercise influence over corporate policy is through the election of the board of directors, approval of extraordinary matters, and the right to bring suits to enforce these rights. Shareholders don't have a direct voice in policy decisions. Shareholders are neither agents nor managers of the corporation.