The board of directors has the power to act on behalf of the shareholders to hire and fire the operating management of the firm. In a legal sense, the directors are "principals" and the shareholders are "agents".

Board Of Directors

The Board of Directors is a group of elected individuals tasked with overseeing the major decisions and policies of a company.

Shareholders

Individuals or entities that own shares in a corporation, giving them ownership stakes and typically the right to vote on corporate matters.

Principals

Principals typically refer to the main parties involved in a transaction or operation, such as the owners or chief stakeholders of a company.