Understanding The Board Of Director's Meeting by David Gass
Once a corporation is formed, it must form a board of directors. The number of directors varies from state to state, but a minimum of one director is essential. After the incorporation of the company, it is the board of directors, which organizes the company by laying out the rules. They adopt bylaws drafted by the company�s attorneys. The board of directors makes provisions for shareholders� conduct, establish committees, delegates titles and duties to officers, decides upon the issuance and cancellation of stock certificates, declares the amount and types of dividends, establishes bank accounts and a fiscal year, and adopts a corporate seal. At regularly held meetings they discuss whether to hire brokers, attorneys or accountants, discuss strategies when facing litigation, renew contracts, make new contracts, terminate specific contracts, terminate or hire employees, terminate or make leases and 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, appoints an officer to act as a secretary, and maintains minutes of all the meetings. The board�s duty is to establish business policies and to approve contracts or reject them. The board may elect a president. The officers, who have been appointed to carry out the day-to-day operations of the company and the various employees, are under the supervision and directions of the board of directors. For any decision to be valid, the board of directors must act collectively and cast votes. The board must meet regularly and 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. The board needs to discuss the pros and cons and cast votes among its directors in order to pass a resolution. The board must meet no less than five times a year.
The chairman and the Chief Executive Officer (CEO) prepare a schedule of the meetings to be held and the agendas to be discussed in these meetings, issue the schedule at the beginning of the new fiscal year, and send these schedules well before each meeting. Any director may suggest resolutions for discussion. The briefing material provided to the directors about each resolution should be informative to ensure the directors make an informed decision each time they cast their votes.
Numerous software packages available online have made it a relatively easy task to file all the documents and the minutes of these board meetings. The board of directors must maintain these records and the software makes the process easier for everyone involved.
David Gass is President of Business Credit Services, Inc. His company publishes a free weekly e-newsletter on Small Business Consulting at their web site http://www.smallbusinessconsulting.com
Article Source: http://www.articlesnatch.com
Showing posts with label directors. Show all posts
Showing posts with label directors. Show all posts
Thursday, March 12, 2009
Describes how the chairman and others should conduct a board of directors meeting.
How To Conduct A Board Of Directors Meeting by David Gass
The Chairman of Directors presides over the board of directors meeting. The shareholders and directors appoint this chairman. It is this chairman, who calls the meeting of the board of directors. The chairman calls the meeting to discuss those things, which need attention. The chairman sends prior notice of the meeting to the participants about the day, time, and venue of the meeting.
Initiating A Board Of Directors Meeting
Below is a list of formalities that must be observed at a Board Meeting.
1. The chairman must compile a comprehensive list of participants in the meeting. All the participants must be carefully noted to avoid leaving anyone out of the meeting.
2. The chairman must issue a notice of the meeting to all the participants containing the venue, the time, and a brief agenda of the meeting. The participants in the meeting should make a courtesy call reconfirming their intent to be present at the meeting.
3. The chairman must formulate and circulate a detailed agenda of the meeting among the participants, giving them a brief summary of what is expected for the meeting
4. The chairman must make referrals about the agenda and the minutes of the meeting. This helps the board obtain a more comprehensive view of the situation at hand and facilitate decisions
5. The presence of the quorum is the most important part of the meeting's status. The meeting is official and authoritative only when it has the quorum. Otherwise, no decision taken in the meeting is binding.
Features Of A Board Meeting
The board undertakes action on subjects or agendas with shareholder voting. The board pursues only the subjects or agendas passed with a desired majority. These subjects or agendas are known as resolutions and usually require a majority of the shareholders' votes to pass. However there are resolutions that need the majority of the members of the Board of Directors, not the shareholders.
The board appoints different committees, which officiate and take actions reserved for the board. Generally these executive committees consist of at least one of the directors. There are exceptions as to the authority of these executive committees on a few subjects, which are listed below.
1. The introduction of any change or amendment of the articles of incorporation.
2. Decisions regarding merger or consolidation.
3. Decisions directing the members to sell, lease, or exchange all or some of the corporation's properties and assets.
4. Decisions regarding the dissolution of the corporation or the revocation of dissolution.
5. The initiation of any change or amendment in the bylaws of the corporation.
6. Appointments to fill the vacancies in the board.
7. Monetary compensation of the Directors for serving on the Board or on a committee.
8. Adjournment or cancellation of stock or termination of membership
The documentation of the minutes and other formalities are a cumbersome job. To make the process easier, several websites have designed software packages that take care of all these things.
David Gass is President of Business Credit Services, Inc. His company publishes a free weekly e-newsletter on Small Business Consulting at their
web site http://www.smallbusinessconsulting.com
Article Source: http://www.articlesnatch.com
The Chairman of Directors presides over the board of directors meeting. The shareholders and directors appoint this chairman. It is this chairman, who calls the meeting of the board of directors. The chairman calls the meeting to discuss those things, which need attention. The chairman sends prior notice of the meeting to the participants about the day, time, and venue of the meeting.
Initiating A Board Of Directors Meeting
Below is a list of formalities that must be observed at a Board Meeting.
1. The chairman must compile a comprehensive list of participants in the meeting. All the participants must be carefully noted to avoid leaving anyone out of the meeting.
2. The chairman must issue a notice of the meeting to all the participants containing the venue, the time, and a brief agenda of the meeting. The participants in the meeting should make a courtesy call reconfirming their intent to be present at the meeting.
3. The chairman must formulate and circulate a detailed agenda of the meeting among the participants, giving them a brief summary of what is expected for the meeting
4. The chairman must make referrals about the agenda and the minutes of the meeting. This helps the board obtain a more comprehensive view of the situation at hand and facilitate decisions
5. The presence of the quorum is the most important part of the meeting's status. The meeting is official and authoritative only when it has the quorum. Otherwise, no decision taken in the meeting is binding.
Features Of A Board Meeting
The board undertakes action on subjects or agendas with shareholder voting. The board pursues only the subjects or agendas passed with a desired majority. These subjects or agendas are known as resolutions and usually require a majority of the shareholders' votes to pass. However there are resolutions that need the majority of the members of the Board of Directors, not the shareholders.
The board appoints different committees, which officiate and take actions reserved for the board. Generally these executive committees consist of at least one of the directors. There are exceptions as to the authority of these executive committees on a few subjects, which are listed below.
1. The introduction of any change or amendment of the articles of incorporation.
2. Decisions regarding merger or consolidation.
3. Decisions directing the members to sell, lease, or exchange all or some of the corporation's properties and assets.
4. Decisions regarding the dissolution of the corporation or the revocation of dissolution.
5. The initiation of any change or amendment in the bylaws of the corporation.
6. Appointments to fill the vacancies in the board.
7. Monetary compensation of the Directors for serving on the Board or on a committee.
8. Adjournment or cancellation of stock or termination of membership
The documentation of the minutes and other formalities are a cumbersome job. To make the process easier, several websites have designed software packages that take care of all these things.
David Gass is President of Business Credit Services, Inc. His company publishes a free weekly e-newsletter on Small Business Consulting at their
web site http://www.smallbusinessconsulting.com
Article Source: http://www.articlesnatch.com
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