Board of Directors

[michael256]

1. When does a corporation needs a board of Directors?
2. Who should and should not serve on the Board of Directors?
3. What about Environmentalist or Union Leaders?

[Kim Smith]

1. It will depend on the jurisdiction and the type of “corporation” but generally a public company must have a board of directors. https://smallbusiness.chron.com/corporation-need-require-board-directors-67764.html
2. In the UK, Listing Rules require listed companies to “comply or explain” whether they have applied the main principles set out in the UK Corporate Governance Code (which is regarded as best practice for unlisted companies). The main principle relating to the composition of the board is that it “should have the appropriate balance of skills,
experience, independence and knowledge of the company to enable them to
discharge their respective duties and responsibilities effectively”. This includes, for example, an appropriate combination of executive and non-executive
directors (and, in particular, independent NEDs) such that no individual or small group of individuals can dominate the board’s decision taking.
3. This is not impossible (e.g. employee representation on boards can be found in Germany) but note that it can create issues (e.g. conflict with the boards responsibility to the company). Not all stakeholders will be represented on the board – hence the need for engagement with key stakeholders to deliver business strategy.

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