Board of Directors Flashcards
1
Q
Generally
A
- Board manage corp’s business.
- delegate day to day authority to corporate officers.
- natural persons.
2
Q
Director Composition Requirements
A
- 1 director.
- number and name listed in charter
3
Q
Selection of Directors
A
- initial directors named in charter
- subsequent directors elected by stockholder.
4
Q
Term of Directors
A
- one term, serve up to 5 if provided in articles.
- need some directors up for reelection each year.
- director may be removed with our without cause.
- Exception: staggered board removable for cause
- elected by a particular class of stock can only be removed by that class
- elected by cumulative voting, can’t be removed if vote sufficient to elect director are cast against removal .
5
Q
Meeting Requirements
A
- regular or special meetings, entitled to notice.
- act through unanimous consent (written, filed in corp’s records)
6
Q
Voting Requirements
A
- Directors can’t vote by proxy.
- MD allows meetings to be held by conference call or other electronic means (hear each other?)
- Quorum: majority of directors in office, vary number in charter or bylaws, lower/increase the quorum, can’t take quorum below 1/3 of directors in office. Need majority vote to approve action. Director can’t enter into an agreement governing how he will vote.
7
Q
Board Committees
A
- Directors delegate responsibilities to a committee if a majority of directors vote to establish committee and place certain directors on the committee.
- can’t delegate following: issuing stocks, recommend actions to stockholders that require stockholder approval, amend bylaws, approve any merger or share exchange that does not require stockholder approval.
- federal law: sarbanes-oxley act important in committtess, -public companies have audit committe, compensation, and nomination, directors on these must be independent.
- dodd-frank act “say on pay” stockholders able to vote on compensation scheme for directors.
