What Are the Responsibilities of a Company's Board of Directors Could the Board of Directors at Enron Especially

Vote on major operating proposals. (large capital expenditures)

Vote on major financial decisions. (issuance of stocks)

Offer expert advice to management.

make sure that the firms's activities are accurately reported to shareholders.

The board of directors provides an important corporate governance function , because it is a part of the firm's organizational structure ( at the top of the corporate hierarchy) so it might be considered the most important internal monitor of the company.

The board legal duties:

according to business corporation act, Every state requires that a corporation should have a board of directors , and a corporation should be exercised and managed under the authority and direction of board of directors. Moreover , directors required to act in good faith, sincere , and meet the best interests.

Directors have a fiduciary duty , to enhance the firm's profitability and share value. Directors also have a duty of loyalty and fair dealing. They must also exercise the duty of care. Finally, board of directors must have a duty of supervision.

Election of directors :

Shareholders vote to elect the board of directors. the vote depends on the voting power of each share of stock. All of the board of directors can be removed and replaced by the shareholders for any reason or no reason, although the timing of replacements may vary depending on the company's rules. However , the process of electing the board of directors is not easy in large corporations.

When there is a contested vote to elect directors , this is called proxy fight , which means management and discontented shareholders try to persuade other shareholders to vote for their candidates.

Nowadays , voting is becoming an easy way , because of increasing the electronic communication and the technological develepments.

Major Responsibilities of Board of Directors

1. Determine the Organization's Mission and Purpose

2. Select the Executive

3. Support the Executive and Review His or Her Performance

4. Ensure Effective Organizational Planning

5. Ensure Adequate Resources

6. Manage Resources Effectively

7. Determine and Monitor the Organization's Products, Services and Programs

8. Enhance the Organization's