Final answer:
The statement is true as the board should implement policies that separate policymaking from management to avoid conflicts of interest and ensure effective governance. However, the influence of executives in selecting board members can compromise the board's autonomy and oversight role.
Step-by-step explanation:
The board of directors has a significant role in ensuring that a firm operates in the best interests of its shareholders, who are the true owners of a company. A clear separation of policymaking responsibilities from management responsibilities is generally seen as a good corporate governance practice. The statement that the board shall develop and implement policies that clearly separate the policymaking responsibilities of the board and the management responsibilities of the executive director and the staff is true. This separation helps to prevent conflicts of interest and ensures that the executive director and staff manage the day-to-day operations of the company while the board focuses on broader strategic issues and oversight.
However, in reality, the executives often have a strong influence on the selection of board members. While this system aims to balance interests, it can sometimes lead to compromises in the autonomy of the board, as these executives may choose board members who are sympathetic to their management styles or decisions, potentially undermining the board's role as a watchdog for shareholders. Thus, while the principle of separation of powers is designed to promote accountability and protect shareholder interests, its effectiveness can be influenced by the actual dynamics in the selection of board members.