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Increasing Board Power Pros and Cons

Mechanically speaking, the shareholders elect the directors who elect the officers. In small businesses, this is the way it really works. However, in big business, the officers have practical control over the nomination and proxy solicitation process. Reacting to several high profile corporate failures, Congress has legislated greater power for directors. Discuss the distribution of power between the Board and Management.

Is increasing the power of the Board at the expense of the power of the Chief Executive always in the best interest of the shareholders? Contrast the similar issue in the political arena regarding the relative powers of Congress and the President.

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The board in large regard represent the shareholders and are they to ensure that the vision, mission , and objectives are realized by the management of the company. Technically the board has a lot of power. However, this is not ...

Solution Summary

This solution provides a discussion on the division of power associated with an organizations Board of Directors and Senior executive leadership to include the CEO. 163 words.