The existence of the derivative action remedy means that directors are unable to treat the corporation as their own personal fiefdom with impunity.

Question

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The derivative action remedy allows shareholders to take legal action on behalf of the corporation against directors who have breached their fiduciary duties or mismanaged the corporation. This means that the directors cannot act in their own interests at the expense of the corporation without consequence, as shareholders are able to hold them accountable through the derivative action remedy.

The Existence of the Derivative Action Remedy Means That Directors