Shareholders exert control of the management of the firm by

Question

Quizplus · Accepted Answer

Shareholders elect the board of directors, who are responsible for hiring and firing top executives. This gives shareholders indirect control over the management of the firm. Shareholders do not typically directly replace management with themselves, nor do they run the daily operations of the firm. Buying shares in an IPO at a discounted price may give a shareholder financial benefits, but does not give them control over management.

Shareholders Exert Control of the Management of the Firm by