Mention the phrase “board of directors” to the average investor, and they are likely to conjure up images of nicely dressed men and women standing around a mahogany table, smiling congenially. This is entirely understandable; many annual reports prominently feature glossy photographs of just such a scene. Now, ask the investor to describe the primary responsibility of the board of directors and very few will be able to give you a definitive answer.
http://beginnersinvest.about.com/cs/a/aa2203a.htm
In a company where no controlling shareholder exists, the directors should act as if one did exist and attempt to protect this imaginary entity at all times (even if it means firing the CEO, making changes to the structure that are unpopular with management, or turning down acquisitions because they are too pricey).
