What is the difference between directors, officers, and shareholders?
The Board of Directors of a company is appointed by the corporate shareholders. The Board of Directors decides when dividends will be paid, they appoint the corporation’s officers (the President, the Vice President, Secretary and Treasurer) and they also control the company’s resources and expenditures. Typically, directors do not need officer consent for certain actions and decisions; instead, they seek the approval or voting action of the shareholders. Appointed by the Board of Directors, officers must seek the approval of the board and shareholders before any executive decisions can be made. The initiatives of the directors and officers must be in mutual agreement with the goals and aspirations of the shareholders. In some small businesses, the directors, officers, and shareholders are all one in the same.
