Asked by kiasjah mathews on Jul 08, 2024
Verified
With respect to the board of directors of a corporation, which of the following is NOT correct?
A) They manage the business and affairs of the corporation.
B) They are the shareholders' elected representatives.
C) They must always obtain shareholder approval before deciding questions of operating policy.
D) They have the authority to delegate power to officers and agents.
Operating Policy
Guidelines or principles that direct the operations and decision-making processes within an organization or business.
Board of Directors
A group of individuals elected by shareholders to oversee the management and make strategic decisions for a corporation.
- Recognize the legal safeguards afforded to corporate directors and officers, including the business judgment rule.
- Comprehend the process of corporate policy formulation and the involvement of the board in these decisions.
Verified Answer
MH
Maria HarikaJul 12, 2024
Final Answer :
C
Explanation :
While the board of directors is responsible for managing the business and affairs of the corporation, they are not required to obtain shareholder approval for all decisions related to operating policy. Some decisions may be delegated to officers and agents without requiring shareholder approval. However, major decisions such as mergers or significant financial transactions would typically require shareholder approval.
Learning Objectives
- Recognize the legal safeguards afforded to corporate directors and officers, including the business judgment rule.
- Comprehend the process of corporate policy formulation and the involvement of the board in these decisions.