In a corporation,which is the proper relationship between the two groups mentioned in each selection below?
A) The senior manager selects the members of the board.
B) The shareholders select the senior managers, who then select the board members.
C) The key employees select the shareholders.
D) Shareholders elect the board of directors, who oversee the management team.
E) The board of directors selects the shareholders.

Question

Quizplus · Accepted Answer

In a corporation, shareholders have the ultimate power as they are the owners of the company. Thus, they elect the board of directors who are responsible for overseeing the management team. The senior managers are appointed by the board and are accountable to them. Key employees do not have the authority to select shareholders, as shareholders are typically individuals and institutions that have invested in the company's stock. The board of directors also does not have the power to select shareholders, as shareholders can buy and sell their own shares on the open market.

In a Corporation,which Is the Proper Relationship Between the Two