Final answer:
A panel of decision makers elected by the shareholders is known as the board of directors. They are responsible for corporate governance and oversight of the company's top executives, but the effectiveness of this governance can vary as seen in historical examples like Lehman Brothers.
Step-by-step explanation:
The board of directors is a panel of decision makers who are elected by the shareholders to oversee the management and make major decisions for the company. Shareholders, who are the owners of a public company, vote for the board of directors, who are responsible for the strategic direction and corporate governance of the company. The more shares a shareholder owns, the more influence they have over the board's composition. The board in turn hires and supervises the company's top executives. However, these executives often have a say in proposing candidates for the board, potentially influencing its makeup.
Instances like Lehman Brothers, where corporate governance failed to provide accurate financial information, highlight the potential weaknesses in the system. Such failures can harm investors, particularly when large shareholders like mutual funds or pension funds are involved.