Exam 37: Corporate Governance and the Sarbanes Oxley Act

Mark is the treasurer of Sky-Hi-Tech Corporation and,as such,he is responsible for protecting the assets of the corporation.One of Mark's subordinates,Jill,is in charge of reconciling the monthly corporate bank statements.Over a period of several months,Jill embezzles a large amount of money from Sky-Hi-Tech,covering up the theft using her bank reconciliations.If Mark had adequately supervised Jill,she could not have embezzled this money.Mark's actions (or inactions)constitute a breach of his duty of:

Bob and Rob each own 50 of the 100,000 issued and outstanding shares of Synapsegap Corporation.If Bob develops a product and starts a company that competes with the Synapsegap product,he:

Stockholders may not vote by electronic communication.

The articles of incorporation,as well as the bylaws,may not require a greater than majority of directors to comprise a quorum of the vote of the board.

Officers of a corporation typically can have which types of agency authority?

In order to vote shares at a shareholders' meeting,a person must own the shares as of:

Hank is a director of the Cardinal Corporation.Cardinal is in the business of marketing new inventions.Katrina has just invented a new product and wants to have it marketed by Cardinal,so she shows and discusses the new product with Hank.Hank thinks the new product has the potential to generate huge profits,so Hank suggests that he handle the marketing personally,leaving Cardinal out of it.Hank's action is best described as which of the following?

All classes of common stock must have voting rights.

The bylaws of a corporation may require a "supermajority" vote for certain issues.

John is a director for Dream Drive Corporation.Dream Drive is in the business of selling insurance.John sees how lucrative this field is and starts a new corporation to sell insurance.John has violated his duty of:

"Piercing the corporate veil" can refer to:

Shareholders own the corporation.

Courts will pierce the corporate veil if the corporation has been formed without sufficient capital.

Shareholders may not inspect the minutes of shareholders' meetings.

The preemptive right allows shareholders with sufficient shares of stock the right to be on the board of directors.

There are no accountants on the board of the Oriole Corporation.The board routinely relies on a CPA to explain the financial situation of the corporation.The board does not do an independent analysis of the CPA's report,but acts with care and diligence.In these circumstances,the board is:

A special shareholders' meeting may be called by any person authorized to do so by the articles of incorporation or bylaws.

Officers are not liable on an unauthorized contract regardless if the corporation ratifies it or not.

Shareholders can lose their limited liability if a corporation has been operated without the correct separateness between the owner and the corporation.

Generally,a shareholder may not sue his corporation for which of the following?