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Corporations • Directors and Officers
CORP#027
Legal Definition
Directors must manage the corporation. However, they may delegate management functions to a committee of one or more directors that recommends actions to the board of directors.
Plain English Explanation
Directors are like captains of a ship, and they have an obligation to steer the ship. Companies need people to make decisions, sign things, and keep things running. If a director is elected to their position but chooses to scroll through Reddit every day instead of actually doing their job, they will be in breach of their duty to manage. Note that this doesn't mean every director has an obligation to tend to every decision; directors can designate certain directors or teams of directors to be in charge of certain types of decisions that are then brought back to the board for a vote.
Related Concepts
Can a corporation indemnify an officer or director who is held liable to their own corporation?
Can a corporation indemnify an officer or director who successfully defends themselves against a lawsuit from another party?
How can a director defend against a claim that they breached their duty of loyalty?
What are some common examples of permissive indemnification?
What are the statutory requirements of board of directors meetings?
What are the statutory requirements of directors?
What duties do directors have to the corporation and shareholders?
What duties do officers have to the corporation and shareholders?
What is the business judgment rule?
What is the duty of care?
What is the duty of loyalty?
What is the duty to disclose?
When do officers and directors often seek indemnification?
Who decides whether a corporation will indemnify a director or officer?
