Final answer:
The best entity to conduct periodic reviews of Hall Company's investment activities is an investment committee of the board of directors, as it aligns with the principles of corporate governance and provides oversight to ensure investments are made in shareholders' interests.
Step-by-step explanation:
When Hall Company decides to invest large amounts of funds in securities and derivatives and delegates the purchase and sale decisions to a responsible financial executive, the suitable person or persons to make periodic reviews of the investment activities fall under the umbrella of corporate governance. The best entity to fulfill this oversight role is generally an investment committee of the board of directors. This is because the board of directors, as the first line of corporate governance, has the responsibility to monitor the actions of the company's executives and ensure that they are aligned with shareholders' interests. Furthermore, in light of the Lehman Brothers case, where corporate governance failed to provide accurate financial information to investors, it underscores the importance of effective review and oversight mechanisms, such as an investment committee.
The chief operating officer and the corporate controller are positions that typically report to the top executives, and while they are part of the internal management team, their roles are more operational and financial management focused, respectively. The treasurer is directly responsible for handling the funds and financial instruments of the company, which could lead to a conflict of interest if also charged with reviewing the investment activities. Hence, an investment committee consisting of board members or external experts would likely provide a more unbiased and effective review of the company's investment activities.