Exam 35: Management Structure

The CFPA of 2010 requires that publicly held companies annually include a provision in their proxy statements for a binding shareholder vote on executive compensation.

What are some of the areas where the board determines corporation policy?

If the board delegates to a committee its duty to select a new company president:

Members of the board of directors may not determine their own compensation.

Theodore, as treasurer of Valleyview Corporation, had the duty to invest corporate earnings as he deemed best for the company. When Valleyview Corporation went public, the new board decided that a committee of the officers would make such investment decisions. If Theodore thereafter unilaterally contracted to purchase investment securities with corporate earnings as he had done many times before, such contract would be valid:

By law, a shareholder is always entitled to one vote for each share of stock that he owns.

To whom does a large, publicly held corporation and its management have obligations?

Under the Statutory Close Corporation Supplement to the MBCA, a close corporation may operate without a board of directors.

A quorum will consist of a majority of shares entitled to vote if there are no provisions for any other number in the articles of incorporation.

Closely held corporations sometimes impose supermajority or unanimous quorum requirements even though this creates the possibility of deadlock at the director level.

Which of the following are directors in publicly held corporations?

The officers determine the capital structure and financial policy of the corporation.

The board of directors appoints the officers of the corporation, who are agents of the corporation.

Under the Model Act and in a majority of the states, a quorum of shareholders at an annual meeting may be not less than percent of the shares entitled to vote.

Which of the following is correct regarding the removal of Mr. X from the board of XYZ?

Marjorie is a member of the board of directors of Techno Ko Corp. She would like to have the corporation lend her some money so that she can begin another business venture. Which of the following is correct regarding loans of a corporation to one of its directors?

With respect to the board of directors of a corporation, which of the following is NOT correct?

In closely held corporations, stock transfer restrictions are used to achieve the corporate equivalent of delectus personae.

A director's right of inspection of corporate books and records is: a. similar to a shareholder's right to inspect. b. considerably broader than a shareholder's right, but is still subject to limitations. c. narrower than a shareholder's right. d. unnecessary for most directors, since the books and records relate to officers' duties, not directors' duties.

Notice of a shareholders' meeting may be waived in writing.