3. Management: The group of individuals hired to run the company and manage it on a daily
basis
4. Employees: Perform the actual operational work
Hierarchy of Model: State Charter -> Shareholders -> Board of Directors -> Management ->
Employees
Roles of Shareholders - answer✔-Own stock in the firm and
-Selects board of directors and votes on resolutions
-Degree of each shareholders right is determined by number of shares of stock owned
-Shareholder Democracy: A movement that stems from the lack of power shareholders have
particularly felt in board elections. Three key issues that have arisen from this movement:
1. Majority Vote: Requirement that board members be elected by a majority of the votes cast
2. Classified or Staggered Boards: Those that elect members in staggered terms and have to wait
through the term to elect new individuals
3. Proxy Access: Provides shareholders with the opportunity to propose nominees for the board
of directors
What is board independence and why is there a need for it? - answer✔-When board of directors
do not have ties to the organization
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