Final answer:
The statement that the Chairman of the Board must also be the CEO is false. These are separate roles that can be held by different individuals, with the board responsible for the interests of shareholders and can provide checks and balances against the management team.
Step-by-step explanation:
The statement that 'The Chairman of the Board must also be the CEO' is False. There is no mandate that the CEO must also serve as the Chairman of the Board. While the board of directors has the responsibility to ensure that the firm operates in the best interest of its shareholders, the arrangement and structure of leadership positions can vary. The CEO is typically the highest-ranking executive in a company, responsible for strategic initiatives and day-to-day operations, whereas the Chairman of the Board presides over the board and has a pivotal role in shaping the board's actions and governance policies. It is possible for one person to hold both positions, but this is not a requirement, and in some cases, companies prefer to separate these roles to provide checks and balances.
Furthermore, while top executives might have a strong voice in choosing board candidates, they do not solely dictate who sits on the board. Shareholders have the ultimate voting power to elect board members even though they may often rely on the recommendations of the top executives due to the complexity and resources required in nominating alternative candidates.