Exam 30: Management of a Corporation

Ben is a director of Creation Corporation, an architectural firm. Without informing Creation, Ben goes into business with Design, Inc., a Creation competitor. Ben is liable for breach of

The number of directors who serve on a corporation's board is determined by its bylaws.

When directors delegate a responsibility to a corporate officer, the duty of care related to that responsibility also goes to the officer and the director no longer has that burden.

In most states, an individual can hold only one corporate office.

Corporate officers do not act as agents of the corporation.

A director who becomes involved in litigation because of his or her position has to pay the costs because that director was part of the decision that led to the litigation.

When directors and officers do not act in the best interests of their corporations, the shareholders may sue them on the company's behalf.

Global Enterprises Inc. ' s board of directors can delegate some of its functions to

Most states define a quorum as

Buck is a director on the board of Construction Corporation. The board delegates work to Don, Construction's president, and other corporate officers. Buck fails to reasonably supervise the work. He is most likely liable for

Roy is a director of Sales Service Inc. Sales enters into a contract with TeleCenter Corporation in which Roy has a personal interest. Roy must

Mitch is a director and officer of Numero Uno, Inc. Mitch makes a decision to select a new supplier that results in an increase in costs for Numero Uno and its shareholders. In addition, the Numero Uno board considers a contract to outsource all of the custodial work for the firm with One-of-a-Kind Corporation. Mitch is a director and shareholder of One-of-a-Kind. If the shareholders accuse Mitch of breaching his fiduciary duty to the corporation for the loss on the supplier contract, what is Mitch's best defense? With regard to the One-of-a-Kind contract, what is Mitch's responsibility in this situation?

It is common practice to elect directors for 3-year terms with one-third of the directors being elected every year.

Directors and officers may be liable for negligence in the performance of their duties.

A quorum is the minimum number of directors that must be present in person or via technology in order to make official decisions.

Officers are not fiduciaries of the corporation.

Generally a court will interfere with a business decision if that business decision causes a loss to the corporation.

Nick, a director of Oil Inc., is specially trained in petroleum trading. Oil's board approves several deals in which the company pays too much for petroleum. Nick approves all the deals without first reviewing them. Nick is most likely liable for breach of

Directors and officers cannot be held personally liable for violations of statutes enacted to protect the environment.

A vacancy occurs on the board of directors of Data Storage Inc. How the vacancy is filled most likely depends on Data's