Question

“Line of separation” between owner and agent exist between which of the following. A. Investors and...

“Line of separation” between owner and agent exist between which of the following.

A. Investors and Board of Directors

B. Investors and Chief Executive Officer (CEO)

C. Board of Director and Chief Executive Officer (CEO)

D. Chief Executive Officer (CEO) and Chief Financial Officer (CFO)

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Answer #1

Answer:

Option A: Investors & Board of Directors

Explanation:

The investors who invest the amount in shares/stock of a company are the owners of the company. Hence, the owners of a company are the investors.

Board of directors are a group of people who oversee the affairs of the company and are entrusted with the management of the company. The Board of directors ("Board") act as agents of the company.

Hence, there must exist a 'line of separation' between the owner and agent of a company, i.e. between investors and the board of directors.

Hence, it can be concluded that

Option 'A' is correct and rest all are incorrect.

In case of any doubt, please feel free to comment.

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