Board of Directors

Abstention
Abstention is the act or instance of deliberately refraining from an action or practice, often seen in the context of voting and decision-making.
Annual General Meeting (AGM)
An Annual General Meeting (AGM) is a mandatory yearly gathering of a company's interested shareholders to receive the annual report and elect the board of directors.
Board of Directors
A Board of Directors is a group of individuals elected by the stockholders of a company to set corporate policies and appoint the chief executives and operating officers. They meet several times a year and are compensated for their services.
Boardroom
A boardroom refers to both a space within a business setting where its board of directors holds meetings and, in the context of stockbrokers, refers to an office where registered representatives work.
Budget Committee
A committee responsible for overseeing and managing the budgetary control process within an organization, including the preparation, scrutiny, and submission of budgets for approval.
Budget Director
A budget director is responsible for the administration of the budgetary control process within an organization. They coordinate the flow of information between budget centers, the budget committee, and the board of directors.
Chairman
The most senior officer in a company, presiding at the annual general meeting and usually at board meetings, with varying degrees of involvement in day-to-day operations.
Chairman of the Board
A Chairman of the Board is the highest-ranking officer in a corporation and presides over the meetings of the board of directors. This role may or may not possess the most executive authority within the firm. In some cases, the Chairman also carries the title of Chief Executive Officer (CEO), who is the principal executive of the corporation.
Chief Executive Officer (CEO)
The Chief Executive Officer (CEO) is the highest-ranking executive in an organization and has ultimate responsibility for the management of the company. They report directly to the Board of Directors and are accountable to the company's owners.
Corporate Governance
Corporate governance refers to the system by which companies are directed and controlled, focusing on the structure and relationships that determine corporate performance and accountability.
Cumulative Voting
Cumulative voting is a system of stockholder voting for a board of directors that allows all votes an individual is eligible to cast to be cast for a single candidate. This system is designed to give minority stockholders representation on the board.
Director
A person appointed to manage the day-to-day operations of a company, holding fiduciary and statutory duties, and operating within the bounds of corporate governance.
Directorate
The directorate, also known as directorship, is a group of people elected by shareholders to establish company policies and oversee the management of the organization.
Executive Director
An executive director is a member of a company's board of directors who has management responsibilities for the day-to-day activities of the business. Compared to non-executive directors, executive directors take an active role in running the company's operations.
Hostile Bid
A hostile bid is an attempt to acquire a company without the approval of the company's board of directors. Unlike an agreed bid, a hostile bid is unsolicited and can be seen as unfriendly by the target company.
Independent Director
An independent director, also known as an outside director, is a member of a company's board of directors who does not have a material or financial relationship with the company or related entities, apart from receiving a director's fee, and does not own shares in the company. Independent directors are considered better suited to provide impartial judgment and governance.
Inside Director
An inside director is an employee of a company who sits on the board of directors and participates in the governance and management decisions of the organization.
Interlocking Directorate
An interlocking directorate refers to the practice where individuals serve on the boards of multiple companies. While legal for non-competing firms, it is restricted by the Clayton Anti-Trust Act of 1914 for competing companies.
Non-Executive Director
A Non-Executive Director (NED) is a member of a company's board of directors who does not engage in the day-to-day operations of the business but contributes strategic oversight and independent judgment.
Omitted Dividend
An omitted dividend refers to a dividend that was scheduled to be declared by a corporation but was not voted for the time being by the board of directors. This situation often arises when a company faces financial difficulty and decides it is more important to conserve cash than to pay a dividend to shareholders.
Outside Director
An outside director, also known as an independent director, is a member of a company's board of directors who is not part of the company's executive management team.
President
The President is the highest-ranking officer in a corporation after the Chairman of the Board, unless the title of Chief Executive Officer (CEO) is used. In that case, the CEO can outrank the President. The President is appointed by the Board of Directors and usually reports directly to them.
Proxy Statement
A Proxy Statement is a document required by the Securities and Exchange Commission (SEC) to be provided to shareholders before they vote by proxy on company matters. It includes information on proposed members of the board of directors, inside directors' salaries, and pertinent information regarding their bonus and option plans.
Review (Accounting Service)
A review in accounting service provides limited assurance to the Board of Directors and other interested parties about the reliability of financial data. It does not involve an audit conducted according to generally accepted auditing standards but focuses on inquiry and analytical procedures.
Rotation of Directors
Under the Articles of Association of most UK companies, one-third of the directors must retire each year, ensuring that each director steps down every three years. This allows retiring directors the opportunity to be re-elected, fostering continuity and fresh perspectives.
Staggered Directorships
Staggered directorships serve as a potent anti-takeover measure by ensuring that directors' terms are staggered, thus preventing a hostile bidder from easily gaining control of the board, even with a controlling interest.
Staggered Election
A system of electing a percentage of the board of directors of a public corporation, usually one third, each year for a period of from one to three years. The purpose of staggering the elections is to slow any attempts to take over the corporation.
Statutory Voting
Statutory voting, also known as the one-share, one-vote rule, is a voting procedure commonly used in corporate elections. Each shareholder has one vote per share for each nominee for the board of directors and cannot give multiple votes to a single nominee.
Unpaid Dividend
An unpaid dividend is a dividend declared by a corporation's board of directors that has not yet been distributed to shareholders. Once declared, it becomes a corporate liability until paid.

Accounting Terms Lexicon

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