Question

The board of directors of tarbell industries consists of eight men and four women. a four-member search committee was randomly selected to conduct a nationwide search for the president of the new company.

Answer 1

The question revolves around corporate governance and the selection process for a company's board of directors, highlighting that top executives have a significant influence on this process, which can lead to potential conflicts of interest vis-à-vis the shareholders.

Step-by-step explanation:

The question pertains to the concepts of corporate governance and the dynamics of board of directors selection within a company. The board of directors is in theory the body that ensures a company acts in the best interests of its shareholders. However, in practice, top executives often have significant influence in determining the composition of the board, which could potentially lead to conflicts of interest, as the executives may elect board members who are aligned with their interests rather than those of the shareholders. This can be a concern since not all shareholders have the expertise or financial motivation to nominate alternative candidates for the board, leading to an imbalance in corporate governance.