In a corporation what group has the ultimate responsibility for protecting and managing the stockholders' interests?

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In a corporation, the group with the ultimate responsibility is the board of directors.

Shareholders are the ultimate owners of a corporation.  Since they cannot run the company themselves, they elect a board of directors to represent their interests.  The board is responsible for doing things like setting an overall...

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In a corporation, the group with the ultimate responsibility is the board of directors.

Shareholders are the ultimate owners of a corporation.  Since they cannot run the company themselves, they elect a board of directors to represent their interests.  The board is responsible for doing things like setting an overall direction for the corporation and for selecting its Chief Executive Officer.

Although the board of directors is elected by stockholders, it is possible for it to act in ways that are not necessarily beneficial to those stockholders.  Therefore, it is important (for example) to set up the directors' compensation in such a way that it is tied to the stockholders' interests.

 

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