The general management of a corporation is generally vested in a governing body called a Board of Directors. The control of the stockholders over the management of a corporation generally ceases with the election of the directors. "The directors, in the absence of restrictions in the charter or bylaws have all the authority of the corporation itself in the conduct of its ordinary business." 2

Where an express power has been conferred upon the directors of a corporation to enact by-laws, it seems that they cannot so exercise the power as to enlarge their own powers, and to that extent encroach upon the powers of the shareholders.3 Nor can they, through the instrumentality of a by-law, seize to themselves a power such as that of assessing the shareholders, which has been vested in the shareholders by statute.4 Nor will a by-law established by the directors under the authority of a statute be so construed as to override the law of the land.5

The directors are merely the managers of the property and business of the corporation, and cannot therefore perform constituent acts, by which expression is meant acts which involve fundamental changes, in the constitution of the corporation.6 They can make no change with reference to the nominal capital of the company,7 or to membership, without the consent of the shareholders; for this would have the effect of making the shareholders members of a different corporation from that which they had consented to join.8

The business of the board of directors is conducted at what are known as directors' meetings. These are divided into regular meetings and special meetings. The time and place of the regular meetings and the method of calling special meetings are generally regulated by the by-laws of each corporation. The frequency of meetings varies greatly in different corporations.

2 Middlebury Bank vs. Rutland, etc., R. Co., 30 Vt., 159, 169.

3 Curtis vs. McCullough, 3 Nev., 202.

4 Marlborough Mfg. Co. vs. Smith, 2 Conn., 579.

5 Seneca County Bank vs. Lamb,

26 Barb. (N. Y.), 595. 6 Stark vs. Burke, 9 La. Ann., 341. 7 See Supra VII A., 2a. 8 10 Cyc, pp. 760 and 762.

A majority of the directors of the corporation generally constitute a quorum.

Besides conducting the business of the corporation the Board of Directors elect those officers of the corporation whose election by the stockholders is not expressly provided for. Directors are always elected by the stockholders of the company. In some corporations all the stockholders vote in such elections, and in other corporations the holders of common stock are alone allowed to vote, the holders of preferred stock being excluded.9 The general method of voting for directors is to allow each stockholder to cast as many votes as he owns shares of stock, and on his vote to vote for as many candidates for directors as there are positions to be filled. In a few states, however, the cumulative system of voting has been adopted. Under this system the number of shares of stock owned by each stockholder is multiplied by the number of directors to be elected, and the stockholder is then allowed to cast this total number of votes, for one candidate, or to divide this number of votes among as many candidates as he chooses. The result of this method of voting is to allow the minority stockholders to elect a portion of the directors.