Board of directors: Past, present and future

THE board of a modern corporation has its precursor in the advent of statutory boards. Statutory boards are creatures of legislation. The corporation has two major organs: (i) the board, and (ii) the shareholders. Before the close of the 19th Century, it was assumed that the supreme body that governs the corporation was the general meeting.

The directors are considered to be agents. By the 20th Century, the courts held that much will depend on the articles of association. Members were held to be bound by an agreement to permit “the directors and the directors alone shall manage”. Here, judicial decisions and laws meet with economic reality.