Final answer:
Bylaws help facilitate the operation of a company by establishing rules and are typically created by the president or the board of directors. They are essential for corporate governance and ensure that the company acts ethically and in the shareholders' interests.
Step-by-step explanation:
Bylaws are legal documents that outline the rules and regulations for how a company operates and are usually created by the president or the board of directors. These bylaws help facilitate the business by ensuring that the activities align with the laws, regulations, and the company's goals, reflecting the values of the societies in which they operate, including ethical practices like addressing bribery, discrimination, and whistleblowing. Bylaws also give guidelines for achieving environmental and social goals while building trust and goodwill.
The board of directors has a crucial role in this, as they are elected by the shareholders to oversee the company's management and ensure it operates in the interest of the shareholders. However, the top executives often have significant influence in selecting board members, although they should be accountable to the shareholders, who are the true owners of a public company. This dynamic between the board, executives, and shareholders is a fundamental aspect of corporate governance.