Because the duty of care requires that directors and officers exercise the care that a reasonably prudent person would exercise in comparable circumstances,the standard is a subjective one.So long as people are honest and do their best,it does not matter how incompetent they are.

Question

Quizplus · Accepted Answer

The statement is false. The duty of care requires that directors and officers exercise the care that a reasonably prudent person with similar skills and experience would exercise in comparable circumstances. The standard is an objective one, and directors and officers can be held liable for actions that fall below this standard, regardless of their intentions or good faith efforts.

Because the Duty of Care Requires That Directors and Officers