A Board of Directors is a group of people selected to oversee a corporation. Appointed by the shareholders, Directors of Florida corporations serve to ensure that the company upholds shareholders’ interests. They do so by collectively directing the company’s affairs. The key purpose of a Board of Directors is to ensure the company’s prosperity by directing its activities.
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Last updated: October 30, 2023
by
Jacob Silverman
Freelance journalist and podcaster covering tech, crypto, politics, and corruption.
and
Alex Morrell
Alex Morrell is a senior correspondent at Business Insider covering Wall Street at large.
The Board has many duties. Board members are charged with responsibilities including establishing the mission, vision, and values of the organization. How does the company view itself? This will guide the company’s growth and set the pace for both current and future operations.
Board members also develop the strategy and structure of the business. What are the goals for the company? The Board of Directors evaluates business opportunities that come about now or in the future, review potential threats and risks, and examine current and future strengths relating to the business and the industry.
It is the board’s responsibility to delegate tasks and assign roles. They hire corporate officers such as a CEO, who in turn will hire employees. The Board of Directors ensures that the company’s organizational structure is appropriate for implementing the company strategies it has developed. Board members communicate with senior management to monitor the business.
Finally, the Board of Directors is accountable to shareholders. They serve as the mode of communication between the business, stakeholders, and shareholders. Directors have the responsibility of considering the interests of shareholders when making business decisions.
Directors hold a position of trust, and have a legal responsibility to act in good faith, in the best interests of the company. There are a number of laws imposing duties and responsibilities upon Directors in order to prevent directors from abusing their position of power; there are also laws to protect the Board of Directors from personal liability, should the business fail or suffer a loss.
The Business Judgment Rule is a legal principle absolving Directors, Corporate Officers, and others serving as agents of a corporation from liability for losses incurred by the corporation. This rule covers corporate decisions that were within the power and authority of the Board of Directors to make, and which were made in good faith. This rule is in place to help the Board of Directors of Florida corporations make difficult decisions regarding acquiring another business, selling assets, expanding into other areas of business, and other business strategies without fear of being held liable for their decisions.