Future Business Leaders of America (FBLA) Agribusiness Practice Test

Who makes policy decisions in a corporation?

1. Employees

2. Board of directors

3. Shareholders

4. Managers only

The correct answer is: Board of directors

The board of directors is responsible for making policy decisions in a corporation. This group is elected by the shareholders and serves as the governing body that oversees the corporation's management and operations. They set broad policies and strategic goals for the organization, make high-level decisions, and are accountable to the shareholders for the performance of the company. The board's role includes approving budgets, major business decisions, and ensuring that the corporation adheres to legal and regulatory requirements. While managers execute day-to-day operations and implement policies, it is the board that establishes the overarching framework within which these managers operate. This distinction is essential to understanding corporate governance, as the board of directors fulfills a critical function in balancing the interests of various stakeholders, including shareholders, employees, and the community.