Question

The term "watchdog board of directors" is best explained by which statement?

A) Directors who actively engage in day-to-day management decisions.
B) Directors who focus on aligning executive compensation with company performance.
C) Directors who exercise oversight and scrutinize management decisions to protect shareholder interests.
D) Directors who prioritize personal financial gains over corporate governance.

Answer 1

A watchdog board of directors refers to directors who oversee and scrutinize management decisions to ensure they align with shareholder interests and uphold corporate governance, rather than being involved in day-to-day management or prioritizing personal financial gains.

Step-by-step explanation:

The term "watchdog board of directors" is best explained by the statement: Directors who exercise oversight and scrutinize management decisions to protect shareholder interests. This role involves monitoring the company's executives to ensure that the firm is run in the interest of the true owners—the shareholders. A watchdog board of directors is not typically involved in day-to-day management but rather focuses on providing oversight and ensuring that the executive team's decisions align with shareholder value and corporate governance. They may also play a role in aligning executive compensation with company performance