Final answer:
The CEO does not control the organization's dividend policy; the board of directors holds this responsibility. They make decisions on dividends based on the company's financial state and shareholders' interests, even though the CEO can influence their decision.
Step-by-step explanation:
The statement that the Chief Executive Officer controls the organization's dividend policy is False. Although the CEO plays a significant role in influencing decisions within the company, it is ultimately the board of directors who have the authority to determine the dividend policy, which is then enacted by the company's management.
The dividend policy is an essential aspect of a firm's financial strategy, and it dictates how profits are to be distributed to shareholders. The board of directors, elected by the shareholders, represent their interests and decide upon dividends based on various factors, including the company's profitability, cash requirements for future growth, and the shareholders' expectations.
While the CEO and other top executives may have a substantial influence over the company's operations, including providing recommendations or insights on dividend policy, the board of directors retain the ultimate responsibility for such decisions. This ensures that a system of checks and balances is present within the corporate governance structure to align the firm's actions with the best interests of its shareholders.