This provision authorizes the corporation to adopt bylaws governing the conduct of the affairs of the corporation. The provision provides that the power to adopt and amend bylaws lies with the stockholders. However, if a corporation provides for such in its certificate of incorporation - as most corporate certificates do - then the board of directors may also amend the bylaws. As you might guess, issues may arise when stockholders and directors adopt conflicting bylaws.
This book, and all H2O books, are Creative Commons licensed for sharing and re-use. Material included from the American Legal Institute is reproduced with permission and is exempted from the open license.