Directors, Corporate

Corporate directors are the elected representatives of shareholders, put in place to safeguard the interests of the investors, who bear limited liability for the residual financial risk of their firms. They belong to the corporate governance triumvirate of executives, investors, and directors—a powerful triad charged with ensuring the ethical behavior of these major business institutions. Corporate governance examines the roles of each of these groups along with their interrelationships, responsibilities, and balance of power. Although corporate governance rules and practices vary from nation to nation, this contribution focuses on corporate directors in the United States, given that the preponderance of corporate governance research focuses on U.S. samples. Through most of the 20th century, U.S. directors held significantly more power than did diffused shareholders, although much ...