Exam 29: Management of the Corporate Business

Which of the following does "ex officio" authority refer to?

A director of a corporation has the individual right to:

Scott was a member of the board of directors of Buffalo Corporation. Officers of Buffalo were considering the purchase of new equipment to produce a new product. The board of directors had not been consulted about the new venture, but Scott found out about the plan and objected to its implementation. He sought to inspect the corporate books and records to gain factual information supportive of his position. The officers refused his inspection request, asserting that Scott had no management function or power. Under these circumstances, Scott:

According to the doctrine of substantial performance, directors are not liable for mere errors of judgment when they act with care and good faith.

Directors and officers may usurp a corporate opportunity.

A corporation is liable for all torts committed by its employees while acting in the course of and within the scope of their employment.

What is generally required for fundamental changes in the corporation?

The board of directors of Meckes Corporation, at a regular meeting of the board, entered into a contract with Peter, one of the directors. The agreement called for the sale of a retail store the corporation operated to Peter. There were 12 board members, 10 of whom were present at the meeting. Nine directors, including Peter, voted in favor of the contract and one voted against it. In view of these facts, which of the following is correct?

Which of the following acts requires CEOs and CFOs of publicly traded corporations to certify that, to their knowledge, all financial information in quarterly and annual reports is not false or misleading?

Directors and officers are not prohibited from entering into transactions with the corporation.

What are the three elements that must be met before directors or officers may be found to have usurped a corporate opportunity?

In order to obtain the protection of the business judgment rule, directors need not be free from conflicts of interest.

The Sarbanes-Oxley Act requires chief financial officers (CFOs) and chief operations officers (COOs) of close corporations to certify that, to their knowledge, all financial information in quarterly and annual reports is not false or misleading.

To obtain the protection of the business judgment rule, a director must meet certain requirements in arriving at his or her decisions. He or she must:

The _____ usually keeps the minutes of meetings of the shareholders and directors and other general corporate records such as stockholder records.

Vacancies on the board can be filled:

The _____ binds the corporation on receipts, checks, and endorsements.

The Model Business Corporation Act (MBCA) requires that a director or officer discharge his duties with such care as an ordinarily prudent person in a like position would use under similar circumstances.

If an employee commits a tort despite the corporation instructing him to avoid the act, the corporation cannot be held liable.

Explain the business judgment rule.