Board of Directors
The body elected by shareholders to direct a company's management and safeguard shareholder interests.
How it is identified
Test: directors are appointed by shareholders and owe fiduciary duties to the company under the Companies Act
Unit
qualitative
In depth
The board's legal duty is to the company as a whole rather than to any shareholder group, which is the principle that protects minorities from a controlling shareholder using the board as an instrument. India requires a minimum proportion of independent directors, at least one woman director in listed companies, and a separation of certain committee memberships. Board composition and attendance are disclosed in the annual report, and a board where independent directors are long-serving associates of the promoter satisfies the rule while missing its purpose. Directors' other directorships are also disclosed, which shows how much attention any one company can realistically receive.
Worked example
An annual report shows an independent director who has served eleven years, sits on nine other boards and attended three of eight meetings. Each fact is disclosed; together they describe independence in form only.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Board of Directors” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.