Which of the following best describes the role of the board of directors?

• A. A group of persons elected by stockholders to manage a corporation
• B. The corporate officers
• C. The shareholders as a class
• D. The employees of the company

Answer: (A)

The board of directors is the group elected by stockholders to govern the corporation. Their job is to set broad policy and strategy, approve major actions, and appoint and supervise the corporate officers who run the day-to-day operations. They act as fiduciaries for shareholders, ensuring the owners’ interests are represented in how the company is run. Corporate officers and employees handle daily management, while the ownership (shareholders) owns the company but does not run it themselves unless they are part of the board. This makes the described role—the group elected by stockholders to oversee and guide the company—the best fit.