Who represents the interests of shareholders in corporate governance?

In corporate governance, the primary responsibility for representing the interests of shareholders is vested in the directors of the corporation. The board of directors is tasked with overseeing the management of the company and making strategic decisions that align with the interests of the shareholders. This includes ensuring that the company operates efficiently, adheres to legal and ethical standards, and ultimately generates value for its shareholders.

While officers and managers play crucial roles in executing the day-to-day operations and making tactical decisions for the company, they do so under the oversight and direction of the board of directors. Officers and managers are hired by the board to implement the company's strategic vision, but they do not hold the same fiduciary responsibility to the shareholders as directors do.

The board of directors is collectively responsible for protecting shareholders' interests and ensuring that their expectations regarding return on investment and company performance are met. This governance structure is fundamental to maintaining accountability within the corporation and ensuring that management's actions align with shareholder interests.