Asked by Nguyen BaoThien on Jul 27, 2024
Verified
A corporate director may not
A) act in accord with his or her own knowledge and training.
B) use prudent business judgment in the conduct of corporate affairs.
C) delegate work to corporate officers.
D) engage in self-dealing.
Self-Dealing
occurs when a person in a fiduciary position acts for their own benefit rather than for the benefit of the beneficiaries.
Prudent Business Judgment
Refers to making careful and sensible business decisions based on a thorough evaluation of risks and benefits.
- Ascertain contexts that could precipitate infringements of corporate obligations by directors and officers, as well as the likely legal outcomes.
Verified Answer
EP
Eduardo PalmaJul 28, 2024
Final Answer :
D
Explanation :
A corporate director is expected to act in the best interest of the corporation and its shareholders, avoiding conflicts of interest. Engaging in self-dealing, where the director benefits personally from decisions made in their capacity as a director, violates this duty.
Learning Objectives
- Ascertain contexts that could precipitate infringements of corporate obligations by directors and officers, as well as the likely legal outcomes.