Exam 40: Corporate Directors, Officers, and Shareholders

Directors are expected to conduct a reasonable investigation of a situation before making a decision.

A director must abstain from voting on a proposed transaction in which he or she has a personal interest.

Holly is a director of International Foods, Inc. As a director, with respect to the corporation, Holly is

Faye and Grant are shareholders of Hearthside Hotels, Inc. As shareholders, they must approve

Ben is a shareholder of Commerce & Trade Inc. As a shareholder, Ben does not have

​Shauna is an officer for Tropical Shirts Corporation. Due to a bad choice of shirt-maker on Shauna's part, the company's costs increase. Shauna is most likely liable for breach of

​Elise is a director for Fro-Yo Inc. Elise is also a director for Gelato Ice, Inc. When Fro-Yo's board considers a contract with Gelato, Elise must

The articles of incorporation can exclude or limit shareholders' voting rights.

Corporate directors and officers are insurers of business success.

Beth and Curt form Day-to-Day Care, Inc. Ultimate responsibility for policy decisions necessary to the management of corporate affairs rests with Day-to-Day's

​The executive officers represent the ultimate authority in every corporation.

With preemptive rights, shareholders can preempt the decisions of directors and officers with respect to corporate policy.

In some situations, a majority shareholder owes a fiduciary duty to minority shareholders.

Lew is a director of Mines, Inc. Using information that is not available to the public, he makes a profit trading in Mines securities. Lew is most likely liable for breach of

Brad is a shareholder of Cloud Servers Inc. He will be deemed to have a fiduciary duty to Cloud and its minority shareholders if he has a sufficient number of shares to

Stock warrants are distribution of corporate profits or income ordered by the directors.

Ernie is a director of Five-Star Properties, Inc. Ernie is a property appraiser. Five-Star makes several purchases in which it pays too much. Ernie approves all the transactions without evaluating them. He is most likely liable for breach of

Most states do not allow directors to participate in board of directors' meetings from remote locations.

Corporate officers are selected and removed by shareholders.

Sheila is a shareholder of Travels & Trips Inc. She has the right to inspect corporate books and records