The board of directors:
A) helps to establish control mechanisms and guide how the firm will respond to major changes in its environment.
B) should be involved even with the relatively minor variances between expected and actual results.
C) have a legal responsibility to ensure that top managements' best interests are served by the company.
D) is a group of individuals appointed by a firm's top management to supervise a firm's activities and its shareholders.

Question

Quizplus · Accepted Answer

The board of directors is responsible for setting control mechanisms and providing guidance for the firm's response to changes in the environment. They play a strategic role in the management of the firm and are accountable to the shareholders. Therefore, option A is the correct answer. Option B is incorrect as minor variances can be dealt with by management, and the board should focus on major decisions. Option C is incorrect as the board is responsible for overseeing the interests of shareholders and the company, not just the top management. Option D is partially correct, but it misses the fact that the board is accountable to the shareholders and represents their interests.

The Board of Directors