Who is responsible for appointing directors and auditors within an organization?

The role of appointing directors and auditors within an organization typically falls to the shareholders. Shareholders, as the owners of the company, have the authority to vote on key matters during annual general meetings (AGMs) or extraordinary meetings, which include the election of the board of directors and the appointment or reappointment of auditors. This process ensures that the shareholders can influence the governance of the organization, maintaining a level of oversight on those who are responsible for the strategic direction and financial integrity of the company.

The board of directors is typically responsible for guiding the organization and may propose candidates for these positions, but the final decision is influenced by the shareholders through their voting power. This arrangement promotes accountability and aligns the interests of the management with those of the owners.

The audit committee plays a role in overseeing the financial reporting process and the audit but does not appoint directors or auditors. Similarly, executive management may recommend candidates for these roles but does not hold the authority to make such appointments independently, as these decisions are ultimately in the hands of the shareholders.