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The Election Process for a Board of Directors

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A corporation must have a board of directors. Different corporations choose to use different processes for these elections and there are no official rules by which this election must take place. However, some states have laws that organizations must adhere to regarding this process.


The board of directors is elected by the shareholders. Frequently, this board includes one or more of the shareholders themselves. Usually, shareholders elected to the board of directors own a significant portion of the corporation. Ballots list different nominees for positions such as Chief Executive Officer and Chief Financial Officer. They are voted upon by either delegates chosen by the shareholders, or by the shareholders directly. These elections are typically preceded by a presentation from each of the candidates.


The strength of the board of directors comes from the different areas of expertise they bring to the table. While a diversity of talent is desirable, it is important to keep the board's size manageable. Experience is usually the primary trait by which potential board members are judged, but many additional qualities comprise a good executive.


The selection of a board of directors is an important process because a great deal of responsibility is entrusted to them. It is their responsibility to approve corporate bylaws, decide the budget of the corporation, authorize the sale of stock and select corporate officers. These men and women possess considerable talents and leadership skills and help determine the overall direction of the company.