When does a corporation need a board of directors?

1. Board of directors are a separate, parallel form of leadership along with the CEO. Their intentions have to be in the corporation’s best long-term interest (Wheelen et al, 2017). The three groups that make up the corporate governance are the board of directors, top management, and shareholders.

With the past widespread incidences of internal corruption of board of directors, shareholders sometimes question the need for one. Board of directors are in need to direct the affairs of the corporation but not to manage them, in topics of financial position, current strategy, and risks the company may face (2017). Depending on the size of the corporation or the need of the board of directors, it will determine how active and involved the board will participate.