This video discusses the composition and role of a corporation’s board of directors. The board of directors is a group of people who are elected by the company’s shareholders to oversee the company’s executives and operations. The board of directors is responsible for hiring and firing the CEO, declaring dividends, and making decisions related to acquisitions.
Boards usually consists of a mix of inside directors and outside directors. Inside directors are members of the company’s executive team (e.g., the CEO), a large shareholder, or a key stakeholder (e.g., the head of the employees’ union). Outside directors, otherwise known as independent directors, do not have a material interest in the company (an example of an outside director would be the CEO of a different company). The board of directors usually makes decisions with a vote, and meetings are led by a chairperson (who in some cases is the company’s CEO).
The board of directors will also form a number of committees, with the most common committees being the governance committee, the compensation committee, and the audit committee.