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What group has the ultimate responsibility for protecting and managing interests of stockholders?

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βˆ™ 2006-08-26 22:11:37

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There are essentially two groups responsibile for protecting and managing the interests of stockholders: the Board of Directors and the Management Team. Ultimately the responsibility falls with the management team, as they tend to be hands-on in the daily operations of a business. They should know what's going on and be held accountable for not reporting shortcomings, expectations, news, etc. in a timely manner to the Board and also to corporate shareholders. The Board Of Directors is responsible to look after the interests of the stockholders. Among other responsibilities this implies supervision of internal controls to oversee that the laws are adhered to, that profits are generated and that proper external audits are carried out.

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