Rights of Directors

Question 1

Management

Answer 1

The board of directors is tasked with setting the overall strategic vision for the corporation and has the power to hire and fire the officers that manage the corporation

Question 2

Composition, terms, qualifications, and compensation of the board

Answer 2

Composition: A board of directors must have at least one director

Terms: A corporation’s initial directors’ terms generally expire at the first shareholder meeting at which directors are elected. After that, all directors must be individuals elected by the shareholders at the annual meetings

Qualifications: Articles of incorporation/bylaws may set reasonable qualifications for
directors

Compensation: Directors may be compensated for their service at an amount set by the board unless the articles of incorporation or bylaws provide otherwise

Question 3

Removal of directors

Answer 3

Shareholders generally may remove a director with or without cause with a majority vote at a meeting called for that purpose unless the articles of incorporation provide otherwise

Question 4

Meetings

Answer 4

The board as a collective may set corporate policy or initiate a corporate action.

There are two types of board of director meetings: (1) regular and (2) special

Question 5

Actions at meetings

Answer 5

Like shareholder meetings, for actions taken at a board of directors meeting to be legally valid, the following four requirements must be met:

1. Call
2. Notice
3. Quorum
4. Voting

Question 6

Call (meetings)

Answer 6

A corporation’s bylaws usually identify the individual(s) who can call a board meeting

Question 7

Notice requirement (meetings)

Answer 7

Unless the articles or bylaws say otherwise, regular meetings may be held without notice of the date, time, place, or purpose of the meeting. But special meetings require at least two days’ notice (or as specified in the articles or bylaws) of the date, time, and place of the meeting

Question 8

Exceptions to the notice requirement (meetings)

Answer 8

Even if notice is improper, a director waives the right to object by:

1. Signing a formal waiver of the objection; or
2. Attending the meeting, unless the director at the beginning of the meeting (or promptly upon arrival) objects to holding the meeting or transacting business at the meeting

Question 9

Quorum

Answer 9

A quorum of directors must be present for the board to take action; a quorum is a majority of the number of directors specified in or fixed in accordance with the corporation’s articles of incorporation or bylaws

Question 10

Voting

Answer 10

There must be an affirmative vote of a majority of directors present

Question 11

Unanimous written consent

Answer 11

For actions by written consent to be valid, every director currently
serving on the board must sign a document describing the action to be taken, and that document must
be delivered to the corporation