3.4.5 Most officers who are not on the board do attend board meetings

The word "officer" comes from US corporate law. Day-to-day business of the company is handled by the corporate officers, who are appointed by the board of directors. Thus the relationship between the board and the officers is defined.1 The legai model of US corporate governance is that shareholders own shares and the board of directors oversees the management of the company.2 In a public company the board of directors determines the policy and selects the officers who manage the business.3 The board of directors monitors the officers. In so doing the board makes all decisions. Officers, selected by the board, represent the corporation. Their authority of representation depends upon their position as officer, not on their directorship. Individual directors are not agents, unless they are officers.4 This is comparable to the Dutch management board, in which a director has power to represent the company only if he is authorised as such and entered into a public registry as representing the corporation. Officers who are not board members may attend board meetings on invitation to provide the board with as much information as possible. How this is arranged differs from company to company. In some companies they sit in the second row and may only respond to questions and give presentations on their own area of responsibility, whereas in others they can sit in the front row and be involved in the discussion on general strategy. Whatever the case, they nearly always attend informal gatherings and dinners. By their presence they give support to the CEO. Engaging them, and giving them more time to speak and sitting on the front row is better, because then (i) the board is better informed, (ii) other board members get a feeling for the dynamics within the executive team, (iii) it is good for the independent directors to get to know all executive officers, because the board has to ensure that there is an orderly plan of succession for officers.