Question

What is the role of a Board of Directors in corporate management, and from where do directors obtain their power to make these decisions? a. To make sure that bond holders receive no money and that stock holders receive all of the money in a corporation. The Board of directors is inherently corrupt and any bank that lends to a company that has a board of directors will lose money b. The Board of Directors (BOD) is made up of the top level management, each called a director, of the corporation. They manage the day-to-day operations of the company. The Chairman of the Board is always the CEO. The power to make these decisions is from employment in the Board itself. c. To provide oversight and, if necessary, termination of CEOS and other top-level management at corporations. They obtain their authority through ownership of shares which grants voting power to the directors through a process known as proxy. d. Members of Board of Directors are completely and utterly independent of the company. Since all members of the BOD are external the BOD provides monitoring and oversight of the company and it's CEO-- who is always Chairman of the Board.

Answer 1

Will discuss the problem option by option as this will give more clarity on the points mentioned in the options.

Let's get the first option here in the question it is asked the role of the BOD in corporate management and from where do they get the power for decision making, here in the option if we check they have mentioned that bond holder should not receive any money and the shareholders should only be.

But the bond holders of the company are also the investors who have invested to get the fixed coupon rate for specified time period, however by making the payment to the bondholders for there interest payment won't take board members corrupt.

Let's check the second option where the work narrated of the board of the director here would like to clear that BOD or the CEO does not impact the day to day work of the corporate they are the decision makers of the company and to check the overall balance in the company, they don't interfere in routine work of the lower workforce.

The third option tells the power vested to the board members and the shareholders of the company if the CEO or the senior management found guilty in any of the fraud activity then the shareholders of the company do have the power to change them with the voting power given to them as they are main investors of the company.

The fourth option true as the BOD and the other shareholders of the company are independent and are not regularly attached to the company operation, to have the better control over the company and its operation, the CEO or the Chairman of the company is responsible.