Final answer:
The stockholders of a corporation elect the Board of Directors, who oversee the company's management. Shareholders use their votes, proportional to the number of shares they own, to elect the Board members. The practicality of shareholder voting gives them control over the company's governance.
Step-by-step explanation:
The stockholders of a corporation elect the Board of Directors. The Board of Directors is responsible for overseeing the management and strategic direction of the company as well as holding the top executives accountable for running the company on a day-to-day basis. Since individual shareholders are often too numerous and dispersed, the practical mechanism for exercising their control over the company is by voting for the Board of Directors. Each share of stock typically grants the shareholder one vote, and the more shares a person owns, the more votes they have.
In theory, the Board of Directors acts in the interests of the shareholders to ensure that the company is managed in their favor. However, the top executives of the company also play a significant role in suggesting or endorsing candidates for the Board, although shareholders can also nominate directors. Despite this influence from top management, the responsibility to elect the Board ultimately falls on the shareholders, embodying the company's ownership structure.