Exam 37: Corporate Governance and the Sarbanes-Oxley Act

If a fraud is committed by a member of the board of directors of a corporation, a written notice to the corporation from individual shareholders is not required to bring a derivative lawsuit.

The Inkilwas Corporation has 30, 000 shares outstanding.A shareholders' meeting is duly called to amend the articles of incorporation, and 17, 501 shares are represented at the meeting. -According to the RMBCA, what is the minimum outstanding shares that must be represented in this case to have a quorum?

An agreement that requires selling shareholders to sell their shares to the other shareholders or to the corporation at the price specified in the agreement is referred to as ________.

What is the CEO and CFO provision laid out by the Sarbanes-Oxley Act of 2002?

To prove usurping by a director or an officer, a corporation must have had the financial ability to have taken advantage of the usurped opportunity.

The Sarbanes-Oxley Act requires CEO and CFO certification for annual and quarterly reports.

Usurping a corporate opportunity is a breach that can only be committed by a shareholder.

Once the number of board of directors is fixed by the articles of incorporation, the number cannot be amended.

The Kinderfelt Corporation has 15, 000 outstanding shares, out of which, Gordon owns 3, 000.Kinderfelt Corporation plans to raise more capital by issuing another 10, 000 shares of stock.With preemptive rights, how many of the new shares would Gordon have the right to buy before they are sold to the public?

One of the powers of a shareholder is his or her right to elect the board of directors.

Self-dealing is when shareholders use their position to deprive the board of directors of personal monetary gain.

The business judgment rule protects shareholders for honest mistakes of judgment.

The Merrick and Stanley Corporation has 28, 000 outstanding shares.During a proposal for a merger, the shareholders decided to increase the quorum of the vote of shareholders to 75 percent, using the supramajority voting rule.How many minimum affirmative votes would be needed to pass the supramajority voting requirement?

The determination of whether a corporate director or officer has met his or her duty of care is measured in hindsight.

A duty that directors and officers have not to act adversely to the interests of the corporation and to subordinate their personal interests to those of the corporation and its shareholders is known as ________.

Which of the following is true of shareholders?

When is the annual shareholder's meeting held?

Dividends are distribution of profits of the corporation to shareholders.

A ________ is a date specified in corporate bylaws that determines whether a shareholder may vote at a shareholders' meeting.

A director's failure to properly supervise a subordinate who causes a loss to the corporation would be considered a breach of duty of care.