What are the roles of the directors, officers and shareholders in a corporation?

Directors are responsible for managing and supervising the management of the business and affairs of the corporation. Directors have a duty to act in the best interests of the corporation.

Officers are people appointed by the directors of a corporation to specific positions. These positions may include the president, treasurer, or chairman of the Board. Officers are essentially responsible for the day to day miniscule operations of the corporation. It is permissible for an individual to be a director, officer, and shareholder simultaneously, which is often the case in small business.

Shareholders make financial investments in the corporation and are thus adamant about ensuring the corporation excels in business. Shares represent an ownership interest in the company. Shareholders are responsible for ensuring the director(s) is acting in the corporation’s best interest, which in turn maximizes profitability paid to shareholders in the form of dividends. Shareholders can vote to remove the Director, or an individual on the Board of Directors, if they decide the best interest of the company is not being met. Shareholders are also responsible for approving certain decisions of the Director, such as changing the corporation’s by-laws and amending the Articles of Incorporation.