MGSC30H3 Lecture Notes - Lecture 4: Business Judgment Rule, Derivative Suit, Activist Shareholder
Document Summary
Board of directors": highest level of authority. Modern corporations involve a wider distribution of the rights and responsibilities surrounding a business than we ordinary see. Shareholders elect directors to oversee and take responsibility for the business. Directors then appoint officers to run the business. Almost always a privately held corporation: not traded on the market, arrange for private transaction if you want shares, public corporations tradable. It is very possible, and even common, for the same individual to fill multiple roles in the corporate: shareholder, director, officer. Keeping these roles distinct is very important to understanding corporate governance. Shareholder meetings: a corporation must call an annual general meeting (agm) of shareholders. Have to have an agm: at this meeting shareholders do the following: If they like you, you"re in the board. Explain what is going on in the company. Appoint the auditor for the following year.
