Final answer:
The board of directors is responsible for ensuring accurate financial statements, overseeing strategy, hiring and compensating the CEO, and sanctioning management. However, developing targets for divisional managers, option B, is not traditionally a board responsibility but that of executive management. Option B is the correct answer.
Step-by-step explanation:
The board of directors is tasked with a range of responsibilities meant to uphold corporate governance and safeguard the interests of shareholders. Among these responsibilities are ensuring that audited financial statements are accurate, overseeing corporate strategy decisions, hiring and compensating the CEO, and applying sanctions to management when needed. However, not every option listed is a direct responsibility of the board. In particular, developing targets for divisional managers is typically a role assumed by executive management rather than the board of directors. The board's role is more about broader strategy and oversight.
Corporate governance mechanisms are in place to ensure that a company runs smoothly and acts in the best interest of its stakeholders - primarily its shareholders. Historically, instances like the Lehman Brothers case have demonstrated the catastrophic consequences of failures in corporate governance.
Hence, the correct answer is option B: develop targets for divisional managers. This is not typically considered a direct responsibility of the board of directors, as their focus lies on the larger scope of corporate governance, leaving the targeting setting and day-to-day management to the company's executive leadership.