Zhenhua Rui 09/20/2010
Vector Aeromotive Corporation was a company which designed, manufactured and sold exotic sports cars. Vector was the only U.S.-based manufacture of exotic sports cars, and his major competitors were Ferrari and Lamborghini. Gerry Wiegert is the President and founder of this company. In 1987, the board of directors was formed with three directors. This case shows events happening between the board and President Gerry. In March 1993, the company’s financial position was critical, and Vector’s board decided to ask President Gerry to resign from the company due to his bad performance. But Gerry declined to resign and declare a war against board of directors. There was a significant conflict between the board of directors and President Gerry.
In general, the board of directors is a group of elected or appointed members to oversee activities of a company or organization. The board of directors has a fiduciary duty to grow the long-term success of the corporation for the benefit of shareholder, and sometimes for debt holders. The basic fiduciary duty includes: 1) duty of care -duty to make/delegate decision in an informed way; 2) duty of loyalty -duty to advance corporate over personal interests; 3) duty of good faith-duty to be faithful and devoted to the interest of the corporation and its shareholders; 4) duty not to “waste” -duty to avoid deliberate destruction of shareholder value. Generally, the board of directors performs major detail functions as below: 1) provide continuity for the organization; 2) select and appoint a chief executive; 3) govern the organization by broad policies and objectives; 4) acquire sufficient resources for the organization’s operations and to finance the products and services adequately; 5) account to the public for the products and services of the organization and expenditures. The board is corporate governance of the company, which is significant for