how a board of directors is chosen
while no set number of members is required for a corporate board many pursuing diversity as well as cohesion settle on a range of 8 to 12 directors some boards require an uneven number of members to prevent votes from ending in a tie boards often stagger the terms of directors to avoid a full slate of yearly elections for publicly listed companies in the u s members of the board of directors are elected by shareholders at the annual meeting board candidates can be nominated by the board s nomination committee or by investors seeking to change a board s membership and policies for private companies a board of directors can be chosen in a manner that abides by a company s bylaws or articles of incorporation directors may also be chosen by shareholders via simple agreement on whom to appoint directors may be removed in elections or otherwise in instances of fiduciary duty violations in addition some corporate boards have fitness to serve rules that may lead to the removal of a director if broken for example some rules are intended to prevent abuse of board power director conduct that indicates a conflict of interest using insider information for financial gain selling one s votes for personal gain to outside interests or attempting to sway other directors votes to benefit an outside business types of boardsdifferent boards of directors can have different broad mandates for example executive boardthe role of this board is to take on the role of a chief executive officer where there is none and manage a company s operations effectively and profitably it acts to ensure that a company has and maintains a mission and a purpose and meets its goals on an ongoing basis governing boardthis board s purpose is to offer a company owner specific guidance related to the company s business mandate so that it can operate effectively and achieve its future goals advisory boardlike the governing board this board brings insight to a company s top executive it offers different perspectives and experience that can help the company meet specific goals such as growing a network achieving community brand recognition and connection and building a new customer segment fundraising boardthis board is focused on attracting funds that can help an organization meet its goals board members organize various opportunities such as campaigns special events galas tournaments auctions and more to raise money they use their positions in the business community and personal relationships to help an organization financially types of board membersthe board of directors typically is formed from inside and outside directors an inside director is most commonly defined as a company employee though the category sometimes also covers significant shareholders outside or independent directors are only involved with the company through their board membership as a result independent directors face fewer conflicts of interest than company insiders in discharging their fiduciary obligations in addition they bring to the board different points of view and expertise related to different kinds of business outside directors can be invaluable to a board in helping it carry out its responsibilities effectively the board usually will include the company s chief executive officer who is often the board s chairperson and sometimes other senior officers or managers directors may have specific roles and titles for example chairperson or president this individual leads and manages the board of directors they are responsible for setting agendas running successful board meetings establishing committees and other duties they normally represent the company at public events vice chair or vice president the vice chair works closely with the chairperson or president in support of their responsibilities they also help to facilitate directives and may address potential conflicts of interest of board members the vice chair normally fulfills the chairperson s duties when the latter is unavailable secretary the secretary manages the board s administrative tasks they take the board meeting minutes and maintain accurate corporate records treasurer the treasurer focuses on a company s budget financial policies and accounting investments and other financial issues they work with other professionals concerned with the company s financial well being 