Final answer:
Top managers like executive VPs, presidents, managing directors, COOs, and CEOs often determine the candidates for their board of directors, which theoretically operates to protect shareholder interests, but in practice, executives have significant sway due to shareholder disengagement.
Step-by-step explanation:
Top managers such as executive vice presidents, presidents, managing directors, COOs, and CEOs play a crucial role in the governance of a firm. These senior executives are often involved in the decision-making process regarding candidates who will serve on their board of directors. The board theoretically operates to safeguard the interests of the shareholders, who are the true owners of the firm. Nonetheless, these top executives hold significant influence and often select board members, as shareholders may lack either the knowledge or motivation to nominate alternative candidates.
In the realms of corporate hierarchy, those in these high-level management positions typically make critical business decisions and command the highest earnings. Their strategic roles help shape the firm's future and ensure that it complies with the objectives set forth by the shareholders, while often serving as the face of the company in public and business engagements.