One common form of business entity is the corporation, which is organized under specific legal guidelines or rules of incorporation and is legally recognized by the state. Corporations also have distinctive methods of financing such as stocks or bonds, which are not permissible for other business entities. One other unique characteristic of a corporation is the fact that it is managed by a board of directors, elected by the shareholders.

Often a board of directors is composed of individuals that are not involved with the daily operations of the organization. Consider who should be on a board of directors and when it may be appropriate for the composition of the board be mandated as it often is in large corporations. Select a major corporation and research the board of directors.

• Who should be on a board of directors and who should have the power to select those board members?
• What do you think should be the proper role of a board of directors?
• How accountable should the board members be held?

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