1. A director of CVS, the nation's second-largest pharmacy chain with approximately 7,600 stores, has contacted you for advice on the following matter under consideration by the CVS board: 
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3. 1) Discontinuing the sale of tobacco products at all CVS stores. Doing so will cost CVS at least $2 billion in revenue for its next fiscal year. The primary motivation is to disassociate the company from products that pose serious health risks to its users. 
4. 2)Paying rank-and-file CVS store employees 20% over prevailing market wages. This move is also expected to cost CVS billions of dollars. The primary motivation is to decrease the number of working poor. 
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6. The director is leaning towards voting in favor of both initiatives but wants to know whether doing so would expose her or the board to legal liability under state corporate law. What do you think? Assume CVS is incorporated in Delaware and has a standard exculpation provision in its charter.

Answer rating: 100% (QA)

Under Delaware corporate law directors of a corporation owe fiduciary duties to the corporation and its shareholders These duties include the duty of ... View the full answer