Exam 27: Corporate Governance

Jacy wants to submit a shareholder proposal and should submit the proposal to management at least 120 days before the shareholders' meeting.

Under the fairness rule, the court will not interfere with most business decisions as long as the managers do what is fair and legal for the corporation.

Proxy contests involving large, publicly held corporations are regulated by the Department of Commerce.

In the case United States v. Todd Newman and Anthony Chiasson, the Second Circuit Court of Appeals held that for a ____________ to be ____________, she must have the requisite ____________ to receive a personal benefit in exchange for that information.

Michelson was chairman of the board and chief executive officer of a computer manufacturing firm. When considering whether to purchase CompuPrint, the manufacturer of computer printers, Michelson examined CompuPrint's financial records, consulted with legal and financial experts, and conducted an in-depth study of the marketplace and decided that it would be profitable for his corporation to purchase CompuPrint. If CompuPrint turns out to be a poor investment, and a court hears a case challenging Michelson's decision, the court will most likely analyze his conduct based on the ____________ rule.

____________ elect the ____________, who take whatever actions are appropriate and in the best interests of the corporation.

Nonemployees such as financial planners, accountants, auditors, and attorneys are considered corporate outsiders.

If Amanda owns 10% of the stock of Modern Co., she has the common law right to purchase a proportionate share of every new offering of stock by the corporation, unless this right is limited by the corporate charter or by state law.

Once a corporation's board of directors declares a dividend, it becomes a corporate debt and is enforceable by law.

Those who support governmental control demand that the government have a seat in every corporate boardroom in America.

Shareholders of Mitas Corp. are concerned that the directors are not performing their tasks properly for the benefit of the corporation. Discuss what must be done by the shareholders before bringing a derivative suit.

Tye, a director at Big Co., suspects wrongdoing within Big Co. and after investigation, uncovers legal violations. Discuss the steps that must be taken under current law in light of this discovery.

If Drake, a shareholder of Sweet Corp., feels that he has been deprived of the right to purchase some of the corporation's newly issued stock, he:

Jalenos owned voting stock in Altech, Inc. He submitted a 700-word shareholder proposal to management one week before the next shareholders' meeting. The proposal called for the firing of Carter, who was the president of Altech. Management rejected Jalenos' proposal. Point out the problems with Jalenos' proposal.

In general, once a voting trust has been created, it cannot be ended until the specific time period has run its course.

Some suggest that the insistence that all disputes involving U.S. corporations be fashioned under ____________ law a trend known as ____________, makes listing in the U.S. unpopular.

Aliens, minors, and non-shareholders are automatically barred from being members of a company's board of directors.

Seventy shareholders of a large chemical plant entered into a pooling agreement to vote against the corporation's plan to acquire a smaller chemical manufacturing company. On the day of the vote, 25 of the shareholders in the pooling agreement broke the agreement and voted for the acquisition. Brian, one of the shareholders in the pooling agreement who voted against the acquisition, said he was going to bring a lawsuit for breach of contract against the shareholders who broke the agreement. Can Brian expect to win such a lawsuit? Why or why not?

When shareholders join together in a temporary arrangement, it is called a:

In order to bring a derivative suit, a shareholder must own stock: