Board of Directors
Definition - What does Board of Directors mean?
A board of directors is a group of people who are representatives of a company's shareholders and who are responsible for making senior-level decisions regarding the company. Boards of directors are elected by shareholders. They have major responsibilities and power within the company. In the context of the law, all publicly traded companies must have a board of directors.
Justipedia explains Board of Directors
The benefit of a board of directors is that it allows the shareholders to have a say in how the company is run. Additionally, power is diversified among a group instead of being consolidated to just one person. This allows more room for debate and different opinions about major decisions. Examples of decisions that boards of directors must make include the approval of major contracts, the purchasing of insurance, decisions about lawsuits that the company is involved in, etc.