Corporate Board Roles and Incorporation Documents

Board of Directors: Purpose and Responsibilities

1) What is the purpose of the Board of Directors?
A group of people who jointly oversee the activities of a company.

Functions:

• They must represent the interests of the shareholders and the company.
• Decide whether shareholders receive dividends and, if so, how much they receive.
• Board members approve annual budgets.
• Support the CEO, whether appointed or hired.
• Board members hire and fire top executives.
• They decide on executive compensation.

Who Is in Charge of the Board?

2) Who is in charge of the Board of Directors?
Shareholders of a public company elect the members of the Board of Directors; the board's composition may vary depending on the type of business.

Who Reports to the Board?

3) Who reports to the Board of Directors?
The CEO and the president report to the Board of Directors. The board is chosen by the shareholders and delegates many of the company's most important operational decisions to these executives.

Memorandum and Articles of Incorporation Details

Memorandum/Articles: Typical Contents

1. What sort of information do you think is contained in the Memorandum/Articles of Incorporation?

• Company Name: The unique legal name of the company registered with the relevant authority.
• Business Purpose: The primary objectives or activities the company is authorized to undertake.
• Principal Office Address: The registered address where the company conducts its main operations.

Who Reviews the Memorandum?

2. The Memorandum of Association/Articles of Incorporation is mainly of interest to outsiders. What outsiders do you think may be interested in the Memorandum of Association?

• Investors and Potential Buyers: To understand the company’s purpose, legal standing, and ownership structure before making investment decisions.
• Regulators and Tax Authorities: To verify compliance with laws and to assess tax obligations.
• Auditors and Financial Institutions: To evaluate the company’s legitimacy and its operational and financial framework.

Who Are the Insiders for Articles/Bylaws?

3. The Articles of Association/Company Bylaws are mainly of interest to insiders. Who do you think those insiders are?

• Shareholders: To understand their rights, voting powers, and dividend policies.
• Board of Directors: To determine their roles, powers, and procedures for decision-making.
• Company Executives and Employees: To follow the rules and regulations governing internal operations.

What Information Is Included in the Articles?

4. What sort of information do you think is contained in the Articles?

• Rules and Procedures: Regulations for conducting meetings, voting, and decision-making within the company.
• Roles and Responsibilities: Information about the board of directors, officers, and their powers and duties.
• Values and Principles: The company's core values and guiding principles that influence governance and conduct.