Which statement best describes the governance of Public Limited Companies?

Which statement best describes the governance of Public Limited Companies?

• A. They operate without formal governance.
• B. They require no capital, financed by donations.
• C. They have unlimited liability.
• D. They are controlled by a Board of Directors.

Answer: (D)

In Public Limited Companies, governance is provided by a Board of Directors who are elected by the shareholders to direct the company, set strategy, and oversee management. This board is responsible for approving major decisions, appointing and monitoring the CEO, ensuring financial reporting and compliance, and safeguarding shareholders’ interests. The ownership is separated from control: shareholders own the company, while the board and management run its affairs day to day, reporting to the shareholders and acting under fiduciary duties. This structure explains why the governance of a PLC is described as being managed by a Board of Directors.

In Public Limited Companies, governance is provided by a Board of Directors who are elected by the shareholders to direct the company, set strategy, and oversee management. This board is responsible for approving major decisions, appointing and monitoring the CEO, ensuring financial reporting and compliance, and safeguarding shareholders’ interests. The ownership is separated from control: shareholders own the company, while the board and management run its affairs day to day, reporting to the shareholders and acting under fiduciary duties. This structure explains why the governance of a PLC is described as being managed by a Board of Directors.