Question

The true owner(s) of the corporation is (are) the _________.

A)

board of directors

B)

creditors

C)

chief executive officer

D)

stockholders

Answer 1

The true owners of a corporation are the stockholders, and the board of directors is elected to represent their interests in corporate governance.

Step-by-step explanation:

The true owners of a corporation are the stockholders. In corporate governance, the board of directors is elected by the shareholders and serves as the first line of oversight. Their role is to ensure that the corporation is managed in the best interests of its true owners—the stockholders. However, corporate executives often have significant influence over the selection of board members, although shareholders technically have the power to nominate and elect candidates. The auditing firm and outside investors, particularly large institutional shareholders, serve as additional layers of corporate governance. In some cases, as seen with Lehman Brothers, these governance structures can fail, leading to mismanagement and financial discrepancies.