Shareholders and the Board of Directors
Shareholders and the board of directors are two important components of any corporate structure. Both have different roles but they have the same objective: to ensure the success of the business and sustainability over the long term. Understanding the various roles and how they interact is most important aspect of good corporate governance.
The board of directors is click for source https://boardroomdirect.org/accessibilities-with-virtual-data-rooms/ an organization of people who are appointed by shareholders to supervise a company. They usually meet on a regular basis to formulate guidelines for the supervision and management of the company. They also make decisions on a short-term basis for example, hiring or firing employees, signing an agreement with a service provider and making strategic partnerships. The main function of the board is to safeguard the shareholders‘ money by ensuring that the business is running smoothly and efficiently.
Although there is no legal requirement that directors be shareholders (indeed the initial directors may be listed on the Certificate of Incorporation or Articles of Association, or chosen by the incorporator) directors must hold a substantial stake in the company. They can be either individuals or corporations. The board could have any number of members however, many believe that a maximum of nine members is the ideal number. The authority of the board comes from its bylaws, as well as the voting rights associated with shares.
Anyone can become a shareholder in an publicly traded company through the purchase of stock. In private companies, where there are shareholder agreements or bylaws in place, the shareholders have more control.