Directorate

DEFINITION of 'Directorate'

An organization headed by a director. In finance, directorate is sometimes used in place of "board of directors," which is the group of individuals that makes decisions for a corporation on behalf of its shareholders. In politics, directorates are government or quasi-government agencies or organizations (e.g., Norwegian Petroleum Directorate, OECD Trade and Agriculture Directorate, U.S. Directorate of Defense Trade Controls).

BREAKING DOWN 'Directorate'

When an individual sits on the board of directors of more than one publicly traded corporation, this situation is called an interlocking directorate. Interlocking directorates are common, but can be problematic and even illegal if that individual belongs to the boards of competing companies. A board member is obliged to act in the best interests of the shareholders of any company he or she represents and must be careful to avoid conflicts of interest.

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