Exam 35: Management Structure

Cumulative voting is permitted so the majority of shareholders can keep control of the board of directors.

Who usually determines the compensation of officers and directors? What are some of the executive compensations available?

The officers and the directors are fiduciaries of the corporation,but the business judgment rule will not preclude liability on officers and directors for honest mistakes of judgment.

A proxy is effective until the shareholder revokes it.

Directors may vote by proxy when they are not able to be present for a meeting.

The right of a shareholder to examine the books and records of the corporation is a valuable right.However,it may be denied if the shareholder:

If shareholders agree to vote in a specified manner for the election or removal of directors,this is known as:

Discuss the business judgment rule.

The members of the board of directors are essentially trustees of the corporation.

Which of the following is not true about a corporation's ratification of an officer's act?

Under the Sarbanes-Oxley Act,the audit committee of every publicly held corporation has direct responsibility for the appointment,compensation,and oversight of the work of the public accounting firm employed by the corporation to perform audit services.

Officers who trade on inside information must return their profits to the corporation.

Determining the names of other shareholders in order to communicate with them about corporate affairs is a "proper purpose" for a shareholder to inspect the books and records of a corporation.

Assume that 12,000 shares are represented at a shareholder meeting and a quorum exists.How many votes are normally necessary to carry a motion?

Which of the following is the effect of the business judgment rule regarding the liability of officers and directors?

Greyson is the president of the Speedway Bicycle Company.He also serves as a director of the Flexible Tire Company.It occurs to Greyson that both companies could benefit from a contract in which Flexible agrees to supply Speedway with tires for its bicycles.If Greyson wishes to negotiate a contract between Speedway and Flexible,which of the following is correct?

The minimum number of board members necessary to be present at a meeting in order to transact business is known as:

Zachary has been on the board of his brother's company for three years but has never attended a board meeting.He may be liable for failing to act.

One of the fiduciary duties of directors is the duty not to compete with the corporation.They may pursue their own business interest,but they may not:

Which of the following are directors in publicly held corporations?