New York Law (NYLE) Practice Exam

Who can remove an officer elected by the board of directors of a business corporation?

1. The shareholders by majority vote

2. The board of directors for cause or without cause

3. The CEO alone

4. The agency regulating the corporation

The correct answer is: The board of directors for cause or without cause

In New York law, the board of directors has the authority to remove an officer they have elected. This means that the board can take action to dismiss an officer for cause, which typically involves misconduct, failure to perform duties, or other valid reasons. Additionally, the board can remove an officer without cause, giving them significant control over the management of the organization. This power reflects the fundamental governance structure of corporations, where the board is responsible for overseeing the management of the company and can make decisions related to its leadership. In contrast, the other options outlined don't align with the governance principles under New York corporate law. Shareholders do have influence over the overall direction and major decisions of the corporation, but their power to remove officers is not direct in the same way as the board's authority. The CEO alone does not have the unilateral power to remove an officer without board consensus, and regulatory agencies do not typically intervene in the internal governance decisions of corporations unless there are legal or regulatory violations involved.