What Is the Role of Officers and Directors in a Corporation?

The shareholders of a corporation are the investors who receive ownership in the corporation in return for the money or assets they invest. The shareholders elect a Board of Directors, which has overall responsibility for the business. The Board in turn elects the officers of the corporation, typically a Chief Operating Officer or President, Vice President, Secretary, and Chief Financial Officer, to handle the day-to-day affairs of the corporation.

The Board of Directors has the overall responsibility for the corporation. The directors must act in accordance with the best interests of the corporation and its shareholders. They have a fiduciary relationship with the corporation, which is founded in trust and confidence. The Board is required to hold annual meetings, but usually meets more often than that.

The Board initially:

Adopts Bylaws

Designates the principal business office

Elects officers

Selects the fiscal year

Designates the corporation’s bank or banks

Issues initial stock to shareholders

Pays organizational expenses

Authorizes initial agreements