BUL CH 30

Officers, but not directors, owe a duty of loyalty to the corporation.

F

The business judgment rule makes a director liable for losses to the firm that result from the director's authorized, good faith business decisions.

F

Unlike managers, officers are not corporate employees.

F

Both directors and officers may be immunized from liability for poor business decisions under the business judgment rule.

T

Directors have a right to inspect corporate books and records.

T

For breaching their duty of care, directors may be liable to the corporation.

T

In the conduct of corporate affairs, directors must exercise a different degree of care than in conducting their own personal affairs.

T

Officers have the same fiduciary duties as directors.

T

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

T

Local Corporation invests in intrastate businesses. In Local's state, as in most states, the minimum number of directors that must be present before a board can transact business is

a majority of the number authorized in the articles or bylaws.

Bree is an officer of Chic Petites Corporation. Like most corporate officers, Bree

can act as Chic's agent. can participate in managing Chic's day-to-day operations. must carry out the duties spelled out in Chic's bylaws. has all of these options.

Godfrey is a director of Hospitality Hotel Corporation. Like most directors, Godfrey was most likely

elected by the corporation's shareholders.

Like the boards of most corporations, the board of directors of Paolo's Pizzas, Inc. conducts business through

formal board meetings with recorded minutes.

The board of Consumer Sales Corporation delegates work to corporate officers and employees. If the directors do not use a reasonable amount of supervision, they could be held liable for

none of the above.

Ron is a director of Standard Company. Ron has a right to

participate in Standard board meetings.

Nationwide Company's chief financial officer resigns. After a personnel search, an investigation, and an interview, the board of directors hires Ed. Ed turns out to be dishonest. Nationwide's shareholders sue the board. The board's best defense is

the business judgment rule.

Julio and Gloria are officers of World Export Corporation. As corporate officers, their rights are set out in

their employment contracts with World Export.

The board of directors of Tiger's Pipes & Fittings approves a new line of products for the company to sell and oversees contract negotiations for obtaining the products from the supplier. This is

within the general area of the board's responsibilities.