The board of directors and shareholders are both vital components of the structure any business. While they play different roles, both share the same goal www.boardroomdirect.org/boardable-pricing-plans-2022 of ensuring the company is successful and sustainable in the long term. Understanding the various roles and how they interact is the most important aspect of good corporate governance.

The board of directors is a group composed of people elected by shareholders to supervise the company. They typically meet on a regular basis to create policies regarding overall oversight and management. In addition they are responsible for the short-term decisions such as firing or hiring employees, entering into an agreement with a supplier or signing strategic partnerships, and more. The main function of the board is to safeguard the shareholders' investments by ensuring that the company is operating smoothly and efficiently.

There is no legal requirement that directors must be shareholders (indeed the directors at the beginning may be listed on the Certificate of Incorporation or Articles of Association, or chosen by the incorporator), the directors must have a significant stake in the company. They may be individuals or corporations. The board can have any number of members, however, many think that a maximum of nine members is the ideal number. The authority of the board comes from its bylaws and the voting rights that come with shares.

Anyone can become a shareholder in a publicly traded company through the purchase of stock. However in private firms where there is a shareholders agreement or bylaws the shareholders could have more control over who is eligible to become a shareholder.