Chapter 8, Problem 17AA

To determine

To ascertain the process that a corporation chooses the board of directors and the work of the board of directors?

Explanation of Solution

Stockholder is the community which selects the board of directors for the company. The key aim of the board is to promote the growth and maintain the stability of the company by handling the company's affairs collectively, while serving the correct interests of its shareholders and related stakeholders, so, the board has a duty for protecting shareholder rights, setting management policies, oversight of the corporation.

Economics Concept Introduction

Introduction:   Also known as a shareholder of a company or entity which is cable of dealing one share of an organization's capital stock. Stockholders are also the company’s owner, and usually receive the company's achievement in the matter of increased stock value. Nevertheless, if the price of the company’s stock falls, the stockholder would still have to bear the losses.