chapter $30-$Work Set

True$-$False Questions

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

Officers have the same fiduciary duties as directors.

Directors have a right to inspect corporate books and records.

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

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

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

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

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

Unlike managers, officers are not corporate employees.

Multiple$-$Choice Questions $q,$

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

a$.$ appointed by the secretary of state in the state of incorporation.

b$.$ chosen by a vote of the corporate managers.

c$.$ elected by the corporation's shareholders.

d$.$ selected by the corporation's chief executive officer. $q,$

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

a$.$ annual shareholders' meetings.

b$.$ consultations with corporate officers and employees.

c$.$ formal board meetings with recorded minutes.

d$.$ informal conferences with corporate power brokers.

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

state corporation statutes.

b$.$ World Export's certificate of authority.

c$.$ their employment contracts with World Export.

d$.$ intermeighe