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, in turn, hire and ﬁre management.
B) Control of the ﬁrm ultimately rests with board of directors. They elect the management, who, in turn, 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, as they have the power to elect the board of directors, who in turn hire and fire management. While the board of directors have a significant amount of control and influence over the company, they ultimately answer to the shareholders who have the power to vote them out of their positions.

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