Final answer:
Stockholders of a corporation elect the board of directors, who are responsible for overseeing the corporation and ensuring it operates in the shareholders' interests. Although the election of directors is a shareholder right, top executives often have significant influence over the selection of candidates.
Step-by-step explanation:
The stockholders of a corporation elect the board of directors. This group is responsible for making major decisions and overseeing the management of the corporation. While the board hires the company's top executives, including the president and vice-presidents, it is the shareholders who hold the voting power to elect the board itself. The election process ensures that the corporation acts in the best interest of its shareholders, who are considered the true owners of the company.
However, it's important to note that the top executives often have significant influence over which candidates are presented for election to the board. Due to various factors, including the dispersal of ownership among a potentially vast number of shareholders and the practical challenges for individual shareholders to nominate board candidates, the top executives' choices usually dominate the selection process. This dynamic can sometimes lead to less active shareholder participation in the nomination and election of board members.
In public companies, the number of votes a shareholder has is typically proportional to the number of shares owned, matching the principle that those who have more at stake should have a greater say in the corporate governance.