Florida Broker Practice Exam

In a corporation, who elects the board of directors?

1. The stockholders

2. The officers

3. The state government

4. The majority of brokers

The correct answer is: The stockholders

The board of directors in a corporation is elected by the stockholders. This process is fundamental to corporate governance, as stockholders are the owners of the corporation and have a vested interest in its management and direction. By voting to elect the board of directors, stockholders can influence decisions regarding the corporation’s policies, operational strategies, and overall governance. The board of directors has the responsibility to oversee the management of the corporation and make strategic decisions that drive its success. This accountability to the stockholders is a key aspect of the fiduciary duty that board members have, ensuring they act in the best interests of the company and its shareholders. The roles of officers, the state government, and brokers do not include the authority to elect the board of directors. Officers are appointed by the board to run the corporation's day-to-day operations, while state government oversees regulatory compliance but does not engage in the internal governance decisions of private corporations. Brokers, while potentially important in real estate transactions, do not have any role in the specific election of corporate directors.