Exam 35: Management Structure of Corporations

A quorum of shares must be present at the shareholders' meeting, either in person or by proxy, to make effective decisions.

Regarding the election of directors:

In Donahue v.Rodd Electrotype Co., Inc., the court's opinion stated:

A shareholders' written agreement, unlimited in duration, to vote in a specified manner for the election of directors is a voting trust.

Gerhardt is the president of the Pacer Bicycle Company.He also serves as a director of the Flexible Tire Company.It occurs to Gerhardt that both companies could benefit from a contract in which Flexible agrees to supply Pacer with tires for its bicycles.If Gerhardt wishes to negotiate a contract between Pacer and Flexible, which of the following is correct?

The board of directors generally manages the day-to-day affairs of the company.

Discuss whether officers and directors may entrust important work to others and their potential liability if they do.

The Rutherford Corporation, a publicly held company, has employed Duncan, Saindon & Associates, PSC, as their accounting firm to perform audit services.Under the Sarbanes-Oxley Act, the lead auditor of Duncan, Saindon & Associates must rotate every:

In most states, an officer can be removed for no reason if the board decides to do so.

One difference between large, publicly held corporations and closely held corporations is that more of the shares of closely held corporations are held by institutional investors.

Special shareholder meetings may be called by:

The Dodd-Frank Act requires that every year publicly held companies include a provision in proxy statements for a binding shareholder vote on executive compensation..

The articles of incorporation, incorporation statute, and bylaws set the number of directors.

Most states, as well as the Revised Act, hold that the test for the duty of diligence requires a director or officer to discharge corporate duties:

a.Who selects the officers of a corporation under most state corporate statutes? Who removes them? Explain. b.What duties do the officers and directors of a corporation owe to the corporation? Explain.

In most states, a corporation may, with shareholder approval, limit or eliminate the liability of directors for some breaches of the duties which they owe to the corporation.

If shareholders agree in writing to vote in a specified manner for election or removal of directors, this is known as:

With respect to the board of directors of a corporation, which of the following is NOT correct?

The minimum number of board members necessary to be present at a meeting in order to transact business is known as:

In 2005, the Revised Act was amended to emphasize the responsibility of officers to inform others in the corporation of matters that come to their attention, including any material violation of law involving the corporation or material breach of duty by an officer, employee, or agent of the corporation.