Question

Which of the following statements is true of the board of directors of a corporation?

a) They are primarily responsible for day-to-day operations.
b) They are elected by shareholders.
c) They are employees of the company.
d) Their decisions have no legal significance.

Answer 1

The correct statement of the board of directors of a corporation is that they are elected by shareholders (b).

Step-by-step explanation:

The board of directors of a corporation is elected by shareholders and plays a crucial role in corporate governance and oversight. The primary role of the board of directors is to provide governance and oversight of a company. They are responsible for making important decisions that affect the long-term success of the company, setting strategic direction, and ensuring accountability to shareholders.

While the board of directors plays a crucial role in corporate governance, they are not responsible for day-to-day operations of the company (a), and they are not employees of the company (c). Additionally, their decisions have legal significance and can impact the company's operations and compliance with laws and regulations (d).