ABSTRACT
Most private companies have three key groups of players: the shareholders, the directors, and the managers. The shareholders put up the capital and determine the mission of the venture; the directors set the policy to carry out the mission and oversee management’s performance, while management carries out board policies, manages the work force and deals with day-to-day operational matters. The shareholders drafted the articles of incorporation to preserve their control over the company. Not only did the founding shareholders each purchase the same number of shares of common stock, but all new shareholders followed suit. With forty shares of common stock, each shareholder has the right to appoint one director. With twelve shareholders, a typical board meeting would consist of nine or ten directors, a manageable number. There are enough directors to allow a meaningful debate with opposing views but not so many that speeches substitute discourse.
