Board Of Directors - B Of D

A group of individuals that are elected as, or elected to act as, representatives of the stockholders to establish corporate management related policies and to make decisions on major company issues. Such issues include the hiring/firing of executives, dividend policies, options policies and executive compensation. Every public company must have a Board of Directors.

In general, the Board makes decisions on your behalf for the company in which you invest.

Most importantly, the Board of Directors should be a fair representation of both management and shareholder's interests, because too many insiders serving as directors will mean the board will make decisions more beneficial to management. On the other hand, possessing too many independent directors may mean management will be left out of the decision-making process and may cause good managers to leave in frustration.