Which of the following statement is correct regarding control of the firm?
A) Control of the firm ultimately rests with shareholders. They elect the board of directors, who then hire and fire management.
B) Control of the firm ultimately rests with board of directors. They elect the management, who lead the company.
C) Control of the firm rests with the executives that oversea the strategic planning.
D) Control of the firm rests with regulatory bodies working in unison with executives.
E) Control of the firm rests with government agencies and regulatory bodies working in unison with the board of directors.

Question

Quizplus · Accepted Answer

Control of the firm ultimately rests with shareholders because they have the power to elect the board of directors. The board of directors is responsible for making high-level decisions, including hiring and firing the management team, which aligns with the interests of the shareholders.

Which of the Following Statement Is Correct Regarding Control of the Firm