Final answer:
Shareholders appoint a board of directors to represent their interests in public companies. The board ensures that the firm is run in the best interests of the shareholders and provides oversight and guidance to the top executives.
Step-by-step explanation:
A board of directors is appointed by the shareholders of public companies to represent their interests. The board of directors helps to ensure that the firm is run in the best interests of the shareholders, who are the true owners of the company. The board acts as the governing body of the company and oversees the top executives who run the day-to-day operations.
Shareholders appoint the board of directors to serve as their representatives and to make important decisions on their behalf. The board is responsible for making strategic decisions, setting goals and objectives, and monitoring the performance of the company. They also hire and evaluate the top executives who are responsible for executing the company's strategy.
Having a board of directors provides a system of checks and balances within the company. The board ensures that management is acting in the best interests of the shareholders and is accountable for their actions. They also provide expertise, guidance, and oversight to help the company achieve its goals and protect the interests of the shareholders.