Homework Help: Finance (board of directors)

Posted by Jason on Friday, July 25, 2008 at 12:39pm.

A corporation's board of directors

A. is selected by and cna be removed by management
B. can be voted out of power by the shareholders
C. has a lifetime appointment to the board
D. is selected by a vote of all corporate stakeholders

I read in the text book that a board of directors is appointed by the original stockholders and stockholders are the owners of the company, so (A) is not possible.

(B) is vague because a large public corporation may have millions of stockholders and I think in order vote a member of the board in or out of power a million person stockholder vote is ridiculous.

(C) has a lifetime appointment to the board....once again ridiculous, I can't think of anybody that his a lifetime position other than a parent or monarch.

So that leaves (D) .... Is D correct?

Finance (board of directors) - Ms. Sue, Friday, July 25, 2008 at 12:45pm
I don't think D is correct because of the definition of stakeholder.

http://www.investopedia.com/terms/s/stakeholder.asp

Although a large public corporation may have millions of stockholders, very few of them actually vote at annual meetings. Therefore, B is correct.
Finance (board of directors) - Damon, Friday, July 25, 2008 at 2:58pm
Agree, every year you get proxy vote forms in the mail where you can vote for or against board members if you are a share owner.
Finance (board of directors) - brittany, Sunday, July 27, 2008 at 4:40pm
B is the correct answers its in the finance book look up stakeholders and read that section

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