Corporations need management. “Management of the corporation must be consistent with the objectives and powers of the corporation, and they owe duties to the corporation to manage it prudently in the best interests of the corporation and the shareholders as a whole” (Mallor, et al, 2010, p. 1047). Corporations are too large to have one or two people manage all aspects of daily operations. Instead, there are people who hold important positions within the corporation. Many people work together in different areas with specific duties to perform in order to keep the operation running smoothly.
Directors and Officers of Corporations
The board of directors manages the corporation. ...view middle of the document...
The duty of care is one of the most important duties that directors possess within a corporation.
In addition to the duty of care, there are a few other important duties that are awarded to the directors. “The duty of loyalty requires a director to put the company’s interest ahead of the interests of any other entity, including the director’s own” (Kim, 2010). The duty of disclosure requires the directors to give any and all information in dealing with the shareholders. The business judgment duty gives the directors a responsibility to make informed decisions that are in the best interest of the corporation.
There are people who assist the directors in the everyday management duties. The officers of the corporation are elected by the Board of Directors. They work with the directors in order to fulfill these tedious and important duties that must be completed in order for the corporation to be productive and make decisions in the best interest of the shareholders.
Shareholders of Corporations
Shareholders are owners. These people own a minimum of one share of the stock. Shareholders are entitled to a say in who becomes a part of the Board of Directors. They also have the capability to purchase additional shares of the corporation. Shareholders make money off of the company. “The person or persons who own a majority of...