board of directors

Definition

Economics

  • noun in the UK, a group of directors elected by the shareholders to run a company. In the USA, a group of people elected by the shareholders to draw up company policy and to appoint the president and other executive officers who are responsible for managing the company. The directors are elected by shareholders at the AGM, though they are usually chosen and nominated by the chairman or chief executive. A board will consist of a chairman (who may be non-executive), a chief executive or managing director, and a series of specialist directors in charge of various activities of the company (such as production director or sales director). The company secretary will attend board meetings, but is not a director. Apart from the executive directors, who are in fact employees of the company, there may be several non-executive directors, appointed either for their expertise and contacts, or as representatives of important shareholders such as banks. These non-executive directors are paid fees. The board of a US company may be made up of a large number of non-executive directors and only one or two executive officers; a British board has more executive directors.
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