John,the controlling shareholder of a large national company,elected Allan,Edward,and Mary as its directors.John has just heard of a venture that may or may not be beneficial to the company,but using his power as controlling shareholder,wants to go ahead with it and tells the three directors to approve it,which they do.It then turns out that the venture does more harm than good to the company.In this case

Question

Quizplus · Accepted Answer

John, as the controlling shareholder, owes fiduciary duties to the corporation. These duties include the duty of care, the duty of loyalty, and the duty to account. In this case, John breached his duty of care by failing to exercise reasonable care in making the decision to approve the venture. He also breached his duty of loyalty by putting his own interests ahead of the interests of the corporation. Finally, he breached his duty to account by failing to disclose his conflict of interest to the other directors.

John,the Controlling Shareholder of a Large National Company,elected Allan,Edward,and Mary