Final answer:
An investment committee of the Board of Directors is the best choice for conducting periodic reviews of investment activities made by a designated financial executive, as they provide collective expertise and uphold the board's fiduciary responsibility to the shareholders.
Step-by-step explanation:
The best persons to make periodic reviews of the investment activity authorized by the responsible financial executive would ideally be An investment committee of the Board of Directors. The Board has the fiduciary duty to represent and protect the shareholders' interests and thus is in the best position to oversee executive decisions and ensure that the company's investments are managed wisely. Additionally, the collective expertise of an investment committee can provide more comprehensive oversight than a single executive officer.
The Board of Directors is ultimately accountable to the shareholders and must ensure transparent and effective corporate governance. In the wake of failures such as the Lehman Brothers, it is evident that a strong oversight mechanism is vital for maintaining investor confidence and ensuring the firm's operations align with shareholders' best interests. An investment committee also acts as a check and balance on the financial executive, preventing any potential conflicts of interest and aligning the investment strategy with the company's overall objectives.