Next Article: Closely-Held Corporations
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Who are the members of a corporation?
The corporation is made up of shareholders, directors, officers, and employees. Shareholders are the owners of the corporation. Directors undertake the high-level management and decision-making for the corporation. Officers (and their subordinate employees) run the daily operations of the corporation. Each member of the corporation has specific rights and duties attached to her position. These rights and duties can become confusing when a single individual holds more than one position (such as shareholder, directors, and officer) of the corporation.
• Note: Besides shareholders, directors, and officers, there are numerous other corporate stakeholders (such as vendors, customers, other businesses, etc.) that are not members of the corporation.
• Discussion: Why do you think corporations are organized in the fashion with designated authority and rights? Do you feel that corporate governance should take into consideration stakeholders other than shareholders, directors, or officers? Why or why not?