Meeting Of the Board of Directors of a Corporation

By David Gass

Once a corporation is formed, the next procedure is to form a board of directors and the number of directors may vary from state to state, but a minimum of one director is essential. After the incorporation of the company, it is the board of directors who organize the company by laying out the rules to be followed. They adopt bylaws that have been drafted by the company’s attorneys. The board of directors proceeds to make provisions for shareholders’ conduct, establish committees, delegate titles and duties to officers, decide about the issuance and cancellation of stock certificates, declare the dividends and the kind of dividends, establish bank accounts and a fiscal year, and adopting a corporate seal. At the regular meetings they discuss and decide to hire a broker, or an attorney or an accountant, discuss strategies when facing litigation, renewal of contracts or getting into a new contract, termination of a specific contract, or employee, or of a lease. They may also decide if the company needs to file for bankruptcy.

The Board of Directors decides on the chairman of the board from the board of directors and appoints an officer to act as a secretary and maintains minutes of all meetings. It is the board’s duty to establish business policies and to approve contracts or reject them. The board may also elect a president; the officers who have been appointed to carry out the day-to-day operations of the company and its various employees are under the supervision and directions of its board of directors. For any decision to be valid, the board of directors has to act collectively and cast votes. The board has to meet regularly and can organize special meetings between regular meetings in case of emergencies. The board members have a fiduciary duty towards the company and its shareholders; they must make the right choices and adapt the right strategies to ensure the growth of the company under its guidance. The board passes several corporate resolutions and needs to discuss the pros and cons and carry out a vote among its directors in order to pass a resolution. The board has to meet not less than five times a year. The chairman and the Chief Executive Officer (CEO) will prepare a schedule of the meetings to be held and the agendas to be discussed in these meetings and issue the schedule at the beginning of the new fiscal year and send these schedules well before each meeting. Any director may suggest agendas for discussion. The briefing material provided to the directors about each agenda should be knowledgeable to ensure the directors make an informed decision each time they cast their vote.

go back