Final answer:
Employees are not part of the corporate arrangement under the OBCA; this arrangement includes the board of directors, officers, and shareholders. Employees, while essential to a company, do not hold legal corporate governance responsibilities in this framework.
Step-by-step explanation:
Employees are not a part of the corporate arrangement under the Ontario Business Corporations Act (OBCA). The corporate arrangement includes various roles and responsibilities, but employees do not form the core governance structure of a corporation. Under the OBCA, the board of directors is the primary governing body elected by the shareholders, representing the first line of corporate governance and oversight for top executives. Officers, such as the CEO or CFO, are appointed by the board to manage the day-to-day operations and execute the strategic directions set by the board.
In contrast, an auditing firm is often hired to review the company's financial records, ensuring transparency and accountability. Additionally, outside investors, particularly significant shareholders like those investing through large mutual funds or pension funds, also play a role in corporate governance by exerting influence over the company's decisions.
However, employees, while vital to operations, do not have legal responsibility or authority in these corporate governance roles, unless they are also shareholders, directors, or officers in the corporate framework. An example of corporate governance failure is the case of Lehman Brothers, where the governance system did not provide accurate financial information to investors about the company's operations.