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Board of directors

The Board of directors are a group of individuals elected, usually at an annual meeting, by the shareholders of a corporation to oversee the corporation.

Expanded Definition

The Board of Directors are empowered to carry out certain tasks as spelled out in the corporation's charter. Among such powers are appointing senior management, naming members of executive and finance committees (if any), issuing additional shares, and declaring dividends. Boards normally include the top corporate executives, as well as directors chosen from business and from the community at large to advise on matters of broad policy.

When you're analyzing a company for potential investment, it's important to take a look at the board of directors and determine if they:

  • 1. Act in the best interest of shareholders.
  • 2. Give the CEO good advice when it comes to managing the company.
  • 3. Have a truly independent set of voices.

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