Question

analyze the chart, which depicts a typical corporate structure.
sample corporate structure
shareholders
board of directors
president/ceo
vp sales vp marketing vp production
based on the chart, the primary responsibility of shareholders is to
○ run the business by electing a board of directors, who then hire the company’s leaders.
○ run the business by electing a board of directors and hiring a president and other leaders.
○ make business decisions on the advice of a board of directors, a president, and other leaders.
○ make business decisions on the advice of a board of directors, who follow the expertise of leaders.

Explanation:

To determine the primary responsibility of shareholders, we analyze the corporate structure chart. Shareholders elect the board of directors (not run daily operations directly). The board then hires company leaders (like President/CEO). Let's evaluate each option:

• Option 1: Shareholders elect the board, which hires leaders. This matches the structure (Shareholders → Board → President/CEO → VPs).
• Option 2: Shareholders don’t hire leaders directly; the board does. Eliminate.
• Option 3: Shareholders don’t make business decisions daily; they elect the board. Eliminate.
• Option 4: The flow is Shareholders→Board→Leaders, not the other way. Eliminate.

Answer:

A. run the business by electing a board of directors, who then hire the company’s leaders.