Does the board of directors need shareholder approval to decide operating policies?

Expert Solution

Shareholder – A single person who has own at least one stock of the company or person who has own a share of the company. They enjoy the company’s benefit in form of increase in share value. A Shareholder has all the rights to elect and dismiss the Director on basis of election process in the board by shareholder and stockholder on early basis.

Board of Directors – A Director or a group of directors who act on behalf of the company and company’s shareholder to improve its performance and stock value of the company.

Role of a Director: A director is responsible for each and every actions carried out on behalf of the company. Like, what the staff are supposed to do, customer service, corporate governance, social responsibility, market coverage, strategy formation etc. In simple words, Director is responsible for all the operation polices.

The Director has to act on the interest of the shareholder to improve the share value of the company. The Board of Director has Rights to approve Polices and it is not required for the Director to get approval from the shareholder to decide or perform operation polices of the company.

keosha answered 6 months ago

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