John is a member of the board for his condominium development. John has missed 8 of the last 12 board meetings. The other board members have missed at least 50% of the meetings. The board did not hire an accountant to review the financial reports of the condo manager. Eighteen months after John took his position on the board, an accountant was retained to examine the books of the condo development. The accountant discovered that the manager had embezzled $250,000. Which of the following statements is correct?

Question

Quizplus · Accepted Answer

The board members can be held liable if it is proven that they violated the business judgment rule, which requires them to act in good faith, with due care, and in the best interest of the condo owners. Missing meetings and failing to hire an accountant could be seen as a lack of due care.

John Is a Member of the Board for His Condominium