Chapter 30: Corporate Directors, Officer, and Shareholders Flashcards
No one individual shareholder or director bears sole responsibility for
the corporation and its actions
Who is the ultimate authority in every corporation?
The board of directors
What are the responsibilities of directors?
All policymaking decisions
Selecting a removing the corporate officers
Determining the capital structure of the corporation
Declares dividends
No INDIVIDUAL director can act as
An agent to bind the corporation
As a group, directors collectively control the corporation in a way that no
Agent is able to control a principal
Directors are not ________ because they do not hold title to property for the use and benefit of others
Trustees
A director may be a __________, but it is not necessary
Shareholder
The number of directors is set forth where?
In the corporation articles or bylaws
Historically, the minimum number of directors is
3
Historically, the minimum number of directors is 3, but today, many states permit
Fewer
The initial board serves until
the first annual shareholder meeting
Subsequent directors are elected by majority vote of
Shareholders
A director usually serves for a term of
One year
A common practice is to elect ______ of the board each year for a three year term to ensure management continuity
One-third
A director can be removed for cause. That means?
For failure to perform a required duty
