Briefly describe the manner in which a board of directors conducts business.
What will be an ideal response?
A board of directors usually conducts its business at regular or special meetings of the board. Regular meetings of a board of directors are held at the times and places established in the bylaws. A board can call special meetings of the board of directors as provided in the bylaws. Special meetings are usually convened for reasons such as issuing new shares, considering proposals to merge with other corporations, adopting maneuvers to defend against hostile takeover attempts, and the like. The board of directors may act without a meeting if all the directors sign written consents that set forth the actions taken. A simple majority of the number of directors established in the articles of incorporation or bylaws usually constitute a quorum of the board of directors for transacting business. However, the articles of incorporation and the bylaws may increase this number. If a quorum is present, the approval or disapproval of a majority of the quorum binds the entire board. The articles of incorporation or the bylaws can require a greater than majority of directors to constitute a quorum of the vote of the board. The board of directors authorizes actions to be taken on behalf of the corporation by adopting resolutions. The resolution is put forward by a member of the board, usually seconded by another board member, and then put to the vote of the entire board of directors. Corporate resolutions are recorded in the written minutes of the board of directors' meetings and specify the action taken by the board of directors. Resolutions can be adopted for many subjects that affect the corporation.
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ABC, Inc., is a small clothing manufacturer that produces shirts and pants using two resources: sewing machine hours and cutting machine hours. The production manager can schedule up to 240 hr of sewing machine time and up to 150 hr of cutting machine time. Production of one shirt requires 3 hr of sewing time and 1 hr of cutting time. Each pair of pants requires 2 hr of sewing time and 1.5 hr of cutting time. Each shirt yields a profit of $5, and each pair of pants generates a $6 profit. The objective is to maximize profits. Which of the following is the decision variable for the LP formulation?
A. total revenue generated B. number of sewing hours and number of cutting hours required C. number of shirts and number of pairs of pants to be produced D. total production time
The first bank to receive a check for payment is the intermediary bank
Indicate whether the statement is true or false
Which of the following statements is CORRECT?
A. Firms with a lot of good investment opportunities and a relatively small amount of cash tend to have above-average dividend payout ratios. B. One advantage of the residual dividend model is that it leads to a stable dividend payout, which investors like. C. An increase in the stock price when a company cuts its dividend is consistent with signaling theory as postulated by MM. D. If the "clientele effect" is correct, then for a company whose earnings fluctuate, a policy of paying a constant percentage of net income will probably maximize its stock price. E. Stock repurchases make the most sense at times when a company believes its stock is undervalued.
Until the early 1950s, corporations were legally required to follow the shareholder model
Indicate whether the statement is true or false