Rules for Board of Directors

• When it comes to corporations, be they large or small, for-profit or non-profit, there's generally one thing they all have in common: a board of directors. The board is in charge of governing the company and keeping the corporation accountable, either to its shareholders or the public. To this end, the board follows a series of rules and bylaws.
  
  

Corporate Identification

• A board of directors, prior to incorporation, must define the name, the purpose of the company, the place of business and the primary officers of the corporation, among other important details. The document that spells out these details is known as the Articles of Incorporation or charter.
  
  

Board Membership

• The board of directors has to determine all aspects of board membership within its bylaws. This includes the number of members on the board, the length of their membership terms, their positions as officers in the company and how to recruit and train new members.
  
  

Meeting Structure

• The board's bylaws and policies also must spell out the details of meetings. These details include when and where to meet, the timetable for the meeting, and the procedures for introducing and discussing topics related to the company.
  
  

Resolutions

• When the board has to deal with a specific issue or decision, members must make a resolution. A resolution is required, and must pass, to make changes such as adopting changes to set rules, new programs, new contracts and other important business. These resolutions must be noted in the minutes of the meeting and kept as an article of official company records.
  
  

Committees

• Any committees within the company regarding a topic require the board's approval. The board's policies dictate how to determine members of a committee and their structure, as well as the procedures this committee must follow in its conduct.
  
  

Conflicts of Interest

• The board also often sets provisions to avoid conflict-of-interest in its policies. Often, state statutes specify plainly what constitutes a conflict-of-interest and how the board may approach these issues. State statutes overrule corporate bylaws and are the standard used to develop conflict-of-interest policies.
  
  

Accountability

• The board is responsible for reporting to its constituents (stockholders in for-profit corporations and the public in non-profit corporations) about what the company plans to accomplish and the progress in achieving those goals. The board must report factual information, whether positive or negative, to its constituents.