2. The company was set up under a governor and board of proprietors
A Board of Proprietors was established by the consortium who had persuaded the Queen to empower them. They placed the operation of the company in the hands of a Governor, who they appointed, and in 24 directors, who met as the Board of Directors. Each director was called a committee, they could be a committee of one or of several, at the whim of the Governor. The Board of Directors consisted of 24 such positions. There were an additional ten committees which reported to the Board of Directors. In reality the company was run by a small number of men, at least initially, who met, according to lore, at the Nags Head Inn in Bishopsgate.
In essence the operation of the company in its earliest days was piracy authorized by the Queen. The first voyage by a company ship was by the Red Dragon, under command of James Lancaster. Lancaster captured a Portuguese ship, used the proceeds from the cargo for trade, and used the profits from the trade to establish two trading posts, one in the Spice Islands and one on the island of Java. The trading posts were called factories. Lancaster then returned to England to learn that the war with Spain (which had given a veneer of legality to attacking Portuguese ships) was over and that Queen Elizabeth was dead. The new King, James I, was nonetheless pleased with the influx to his Royal Treasury, and Lancaster was knighted.