The board of directors' primary responsibility is one of gatekeeper, an ultimate internal control mechanism to protect the interests of shareholders, creditors, and other stakeholders. Therefore, one goal is to minimize the ability of management to expropriate shareholder value through financial statement and other forms of fraud and financial malfeasance.

Question

Quizplus · Accepted Answer

This statement accurately reflects the primary responsibility of a board of directors, which is to act as a check on management and ensure that their actions align with the interests of shareholders and other stakeholders. By doing so, the board helps to minimize the risk of fraud, malfeasance, and other actions that could harm the company and its investors.

The Board of Directors' Primary Responsibility Is One of Gatekeeper