Exam 35: Management Structure of Corporations

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

The Investor Protection and Securities Reform Act of 2010 imposes new corporate governance rules on both publicly held and privately held companies.

Incorporation statutes generally require that each share of stock issued carry voting rights.

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 proxy is effective until the shareholder revokes it.

Under the Revised Act and an increasing number of other statutes,by a majority vote,shareholders may remove the entire board of directors without cause.

If Eilene,a shareholder,sues in a derivative suit,the judgment will be paid to:

The remedy for a director's breach of fiduciary duty is:

Directors,but not officers,may compete with the corporation in their own private business dealings.

Compare the respective roles of the officers,board of directors,and the shareholders of a corporation.Who runs the corporation? Explain your answer and give examples.

The business judgment rule would require an officer or director to use the highest duty of care in the execution of his office.

Members of the board of directors may not determine their own compensation.

Only the board of directors may approve fundamental changes in the corporation.

The __________ precludes imposing liability on directors and officers for honest mistakes in judgment if they act with due care,in good faith,and in a manner reasonably believed to be in the best interests of the corporation.

Directors are elected at the annual meeting of shareholders.

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

The type of authority that arises from acts of the corporation that lead third parties to believe reasonably and in good faith that an officer has the requisite authority is:

The 1969 amendments to the MBCA,which were carried over to the Revised Act,tightened restrictions on closely held corporations.

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 the absence of a specific agreement,shares of stock are not freely transferable.