Board Of Directors - B Of D

AAA

DEFINITION of 'Board Of Directors - B Of D'

A group of individuals that are elected as, or elected to act as, representatives of the stockholders to establish corporate management related policies and to make decisions on major company issues. Such issues include the hiring/firing of executives, dividend policies, options policies and executive compensation. Every public company must have a board of directors.

INVESTOPEDIA EXPLAINS 'Board Of Directors - B Of D'

In general, the board makes decisions on shareholders' behalf. Most importantly, the board of directors should be a fair representation of both management and shareholders' interests; too many insiders serving as directors will mean that the board will tend to make decisions more beneficial to management. On the other hand, possessing too many independent directors may mean management will be left out of the decision-making process and may cause good managers to leave in frustration.

RELATED TERMS
  1. Non-Executive Director

    A member of a company's board of directors who is not part of ...
  2. Robert A. Eckert

    The long-standing chairman and CEO of Mattel Inc. since 2000. ...
  3. E-Meeting

    A meeting that takes place over an electronic medium rather than ...
  4. Business Judgment Rule

    A regulation that helps to make sure a corporation's board of ...
  5. Outside Director

    Any member of a company's board of directors who is not an employee ...
  6. Inside Director

    A board member who is an employee, officer or stakeholder in ...
RELATED FAQS
  1. What are the differences between investing in real estate and stocks?

    If you invest in real estate, you are actually purchasing a tangible, physical land or property. Investing in stocks is entirely ... Read Full Answer >>
  2. Do ETFs have a board of directors?

    Yes. An exchange-traded fund (ETF) is a type of security that tracks a basket of assets or an index (such as an index fund), ... Read Full Answer >>
Related Articles
  1. Retirement

    Pages From The Bad CEO Playbook

    Excess compensation, golden parachutes, tunneling and IPO spinning make these bad executives even worse.
  2. Investing Basics

    The Basics Of Corporate Structure

    CEOs, CFOs, presidents and vice presidents: learn how to tell the difference.
  3. Brokers

    Catching Comeback Stocks For Clients

    We'll give you the clues you need to assess which stocks can make a turnaround.
  4. Options & Futures

    Governance Pays

    Learn about how the way a company keeps its management in check can affect the bottom line.
  5. Options & Futures

    Corporate Kleptocracy At RJR Nabisco

    The excess of the '80s brought about reckless spending and indulgent management. This is a story of both.
  6. Options & Futures

    Reining In CEO Rewards

    Could bloated CEO compensation be to blame for the widening gap between the rich and the ultra-rich?
  7. Options & Futures

    The Perks of Trading Coffee Options

    As more people begin to trade coffee, we explain how coffee options work, who uses them, what drives valuations, and the risks and rewards.
  8. Trading Strategies

    Top Day Trading Instruments

    Day trading is an intense and often appealing activity. Investopedia provides the list of top financial instruments for day trading.
  9. Stock Analysis

    Why Should You Invest In Stratasys Today?

    When Stratasys pre-announced its fourth-quarter earnings, management highlighted that its MakerBot acquisition was underperforming expectations.
  10. Options & Futures

    Give Yourself More Options With Real Estate Options

    Real estate options have many benefits, including a smaller initial capital requirement.

You May Also Like

Hot Definitions
  1. Efficiency Ratio

    Ratios that are typically used to analyze how well a company uses its assets and liabilities internally. Efficiency Ratios ...
  2. Fixed Cost

    A cost that does not change with an increase or decrease in the amount of goods or services produced. Fixed costs are expenses ...
  3. Subsidy

    A benefit given by the government to groups or individuals usually in the form of a cash payment or tax reduction. The subsidy ...
  4. Sunk Cost

    A cost that has already been incurred and thus cannot be recovered. A sunk cost differs from other, future costs that a business ...
  5. Technical Skills

    1. The knowledge and abilities needed to accomplish mathematical, engineering, scientific or computer-related duties, as ...
  6. Prepaid Expense

    A type of asset that arises on a balance sheet as a result of business making payments for goods and services to be received ...
Trading Center