What is the relationship between the board of directors and the president of a corporation?

The bylaws of a corporation and the statutes of the state of incorporation control the relationship between the board of directors and the president of a corporation. Typically, the shareholders (owners) elect the directors on the board. In addition to setting business policy, the board of directors appoints the officers of the corporation including the president. The board of directors sets compensation for and reviews the executives it appoints, including the president.

In a closely held corporation, the shareholders, directors and executive officers are often the same people. Some states have statutory provisions which allow simplification of the typical corporate structure in the case of a closely held corporation. It is not unusual for the ownership, policy making and executive roles to be confused and duties (especially review of the president or CEO) overlooked.