When and why does a company require a board of directors? How come it can sometimes overrule or even push out the owner?

Question

When and why does a company require a board of directors? How come it can sometimes overrule or even push out the owner?

In: Economics

Answer 1

A corporation with a board of directors usually doesn’t have one owner, but many owners. Publicly traded companies, like Apple or Microsoft, has many owners, anyone who owns a share is a partial owner. So even if Bill Gates or Steve Jobs were the founders, they are no longer the sole or even primary owners of the company. The board exists to represent the shareholders, and thus owners of the company, to ensure that the company operates in the best interest of the shareholders.