The Responsibilities of a Board of Directors

656 Words Jan 13th, 2018 3 Pages
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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