Who typically comprises a board of directors?

A board of directors is primarily composed of individuals who are elected by the shareholders of a corporation. This group is responsible for making significant decisions that affect the overall direction and management of the company, which includes setting policies, making high-level strategic choices, overseeing executive management, and ensuring that the company acts in the best interests of its shareholders.

The election process allows shareholders to have a voice in how the company is run, as these directors are expected to represent the interests of the shareholders. The presence of shareholder-elected members ensures that there is accountability and alignment with the company's goals and financial performance.

While some members of a board may come from within the company, having individuals who are elected by shareholders creates a system of checks and balances. This ensures that the board does not solely reflect the interests of internal management or any specific group, but rather the broader interests of all shareholders.