A well-constituted board of directors can make a company more
profitable, more valuable, and less vulnerable to risk.
Closely-held corporations and limited liability companies can
customize their boards in many ways, including standards for board
composition and procedures for electing directors. The right blend
of directors (and a mechanism for maintain the right blend, despite
turnover on the board) can provide strong leadership and good
decision making, valuable expertise, broader networks and
credibility in the marketplace, and a means for resolving owner
discord without adversarial proceedings.
State statutes provide standards and procedures that apply to
board composition and election, but these are one-size-fits-all
provisions (referred to as "statutory defaults") that are
meant to apply only if a company has not adopted its own,
customized provisions. In fact, the statutes recognize that many
closely-held companies are poorly served by a board of
