Rights and Duties of Directors in Closely Held Companies

Duties and Responsibilities of Directors of Closely Held Companies

Here are some of the key responsibilities of directors in a closely held corporation:

• Fiduciary duties - Directors have fiduciary duties of care, loyalty and good faith to the company and its shareholders. This includes acting in the best interests of the company.
• Strategic oversight - Directors are responsible for reviewing and guiding the company's overall strategy, mission and vision.
• Financial oversight - Directors oversee major capital expenditures, budgets, financial reporting and internal controls.
• Risk management - Directors identify and monitor material risks facing the company and ensure implementation of risk management policies.
• CEO oversight - Directors are responsible for selecting, evaluating and if necessary terminating the CEO.
• Succession planning - Directors plan for CEO and senior management succession.
• Legal and regulatory compliance - Directors ensure the company meets its legal obligations and properly reports to regulators.
• Corporate governance - Directors establish and oversee corporate governance policies and shareholder meeting procedures.
• Conflict of interest - Directors must disclose any conflicts of interest and refrain from self-dealing.
• Information review - Directors should reasonably review information provided to the board and request additional materials as needed.
• Committee service - Directors serve on board committees such as audit, compensation, nominations etc. as deemed necessary.
• Meeting attendance - Directors should make reasonable efforts to attend all board and committee meetings.

The condensed version: directors help guide the corporation by providing independent oversight and judgment.

Hopkins Centrich Law, Your Shareholder Oppression Law Firm

Hopkins Centrich Law provides cutting-edge, high-quality, creative legal solutions for minority shareholders in Texas Closely Held Corporations when their rights have been abused by the majority owners. Our attorneys and staff have decades of experience in virtually every aspect of business law in The Woodlands and Texas. We have designed and incorporated businesses, managed their every legal concern, engaged in litigation on their behalf, aided with mergers and acquisitions, managed mergers, acquisitions, and sales.

Hopkins Centrich Law knows Texas business law. We are uniquely positioned to help shareholders when they have ample cause to believe their rights are being violated. When we work with a client, our sole focus is on them. We take advantage of everything technology has to offer in order to optimize how we work. That gives us more time to spend with you, more time to understand the issues, and more time to negotiate and prepare for trial.

We get that no one wants to contact a law firm unless they feel they absolutely have to. When they do, it almost always means that ‘things have reached a head.’ The attorneys and staff of Hopkins Centrich Law understand what you are going through. We will make the process understandable; you will know what is happening with your case every step of the way, and you will never have to track us down for answers.

What to Do If You Think Your Minority Rights are Being Violated

First, do not believe anything you read online, or listen to someone who tells you that the Texas Supreme Court did away with Shareholder Oppression lawsuits. The Court merely limited some of the basis for bringing a Shareholder Oppression action. There are still many avenues to relief available, particularly where the majority shareholders have made decisions that are not In the best interests of the business.

Don’t wait. If you think your shareholder rights have been trampled on don’t hesitate to call. Don’t hope that things change, don’t let a matter fester, don’t try to solve the problem yourself through emails and letters and not-so-calm conversations. Contact us. The earlier you do, the better, there are deadlines for every legal action. The longer you wait, the fewer your legal options.