Exam 6: Corporate Directors, Officers, and Shareholders

Corporate officers are selected and removed by shareholders.

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

Directors can delegate work to corporate officers and employees.

Any individual director can act as an agent to bind the corporation.

Each director present at a board meeting has one vote.

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

Corporate officers can normally be removed by the board of directors without cause.

A new position on a board of directors can be created by an amendment to the bylaws.

Donatello is a director and officer of Enzio's Pizza Corporation. Donatello selects an ad campaign that consumers find offensive-a marketing decision that results in a dramatic decrease in profits for the firm and its shareholders. The shareholders accuse Donatello of breaching his fiduciary duty to the corporation. What is Donatello's best defense against this accusation? Later, a resolution comes before Enzio's board to expand its menu to compete with Fabio's Pasta Palace Restaurants Inc. Donatello is a director and shareholder of Fabio's. What is Donatello's responsibility in this situation?

Corporate business matters are presented at a shareholders' meeting of Hollywood Lights Inc., and other corporations, in the form of

Charlie, Dora, and Ethel are the first directors on the board of Face Time Corporation, a social media host. Subsequent directors are elected by a majority vote of Face Time's

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