Sandy is a director of Plex Manufacturing Inc.She reads in a report to the board that the corporation has entered into a series of complex financing transactions.One result of the transactions is that the presentation of the corporation's financial statements has changed to make the corporation look more profitable.Sandy is concerned that these transactions might have been designed to hide the true financial position of the corporation.She decides not to enquire into these transactions, however, because she thinks that if she finds out more about them she will have to do something about it.In doing so, Sandy is in compliance with her duty of care and fiduciary duty because she does not have any clear evidence of wrongdoing.

Question

Quizplus · Accepted Answer

Sandy's decision not to inquire into the transactions may be a breach of her duty of care and fiduciary duty. As a director, she has a duty to act in the best interests of the corporation and its shareholders, which includes investigating any potential wrongdoing or mismanagement. If she has concerns about the corporation's financial statements, she should investigate further and take appropriate action if necessary. Failing to do so could result in legal and financial consequences for both Sandy and the corporation.

Sandy Is a Director of Plex Manufacturing Inc