Question

Which of the following is NOT a role of the board of directors of a publicly traded company?

Group of answer choices

Motivating non-senior employees of the firm

Select, monitor, evaluate and compensate senior management

Oversee the Company’s management of enterprise risk

Review and approve the company’s operating plans and budgets

Answer 1

Option (a) is correct

Usually, board of directors communicates with senior employees of the firm. They are not directly involved in motivating non senior employees of the firm.

Option (b) is incorrect as selecting, monitoring, evaluating and compensating senior management is a role of board of directors. Board of directors act as intermediary between the stockholders and senior management.

Option (c) is incorrect as overseeing the company's management of enterprise risk is a function that is performed by board of directors.

Option (d) is incorrect as reviewing and approving the company's operating plans and budgets is the role performed by board of directors. Board of directors provide the directions to the company. They give vision, mission, determine and review company goals.They set strategies for the company for achieving the goals.