The Responsibilities of a Board of Directors

656 Words3 Pages
Responsibilities of directors The U.S corporate laws bestow the board of directors the responsibility to manage the corporation's business and affairs. This they do in a supervisory capacity. They also delegate the details of day-to-day management of such businesses to other corporation employees. Directors literally act as a group because they are not agents. Directors are fiduciaries of an organization and therefore have power and authority over the management of a business. They can hire, fire, and replace managers (Forrester & Ferber, 2008). Directors can also approve major corporate actions like issuing of securities, entering into merger, converting business from a corporation to a limited liability company among other responsibilities (Forrester & Ferber, 2008). It is the responsibility of the board of directors to approve a manager's request to enter into significant acquisition. This term paper seeks to highlight the roles and responsibilities of directors in a corporation with special focus on corporate and partnership law. The business judgment rule, a critical component of corporate jurisprudence, adduces that directors are in a better position to make difficult decisions that directly impact the rights of the shareholders (Sametz & Bicksler, 1991). The rule assists companies in ensuring that they hire talented directors to manage their corporations. The duty of care compels directors of a corporation to act prudently with respect to all available
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