Question

When is the annual shareholders' meeting held?

A) according to the date fixed in the bylaws
B) at the discretion of the board of directors
C) only if and when there is an organizational crisis
D) only when necessary to elect a new board of members

Answer 1

The annual shareholders' meeting is usually held on a date set by the corporation's bylaws. This event allows shareholders to vote on corporate matters, including the board of directors. The board is accountable to shareholders and is responsible for hiring executives to manage the company's operations.

Step-by-step explanation:

The annual shareholders' meeting is typically held according to the date fixed in the bylaws of the corporation. This is the time when shareholders get to vote on various corporate matters, including the election of the board of directors. The bylaws, which are essentially the rules governing the operation of the corporation, will specify the frequency and timing of these meetings.

While the board of directors has significant influence over many aspects of corporate governance, including proposing candidates for board membership, they must still convene a shareholders' meeting according to the bylaws unless there is a specific provision that allows for an alternate process.

In public companies, where ownership is spread across many shareholders, the board of directors is accountable to the shareholders. The board hires the top executives to manage the company's daily operations, and they are expected to run the firm in the interests of the shareholders, the true owners of the company.