Question 1

Hiring corporate officers and determining their compensation are decisions that would be made by a corporation's board of directors.

Accepted Answer

As per the standard corporate governance structure, the board of directors is responsible for hiring corporate officers and determining their compensation. This is to ensure that there is an appropriate oversight process in place and to align the interests of executives with those of the shareholders.

Question 2

In most states,a director cannot be removed from a corporate board for a breach of duty.

Accepted Answer

In most states, a director can be removed from a corporate board for a breach of duty as it is considered a violation of their fiduciary responsibility. However, the process for removal usually requires a vote of the other board members or shareholders.

Question 3

A corporate officer cannot act as an agent of the corporation.

Accepted Answer

A corporate officer can act as an agent of the corporation. In fact, one of the main roles of corporate officers is to represent and act on behalf of the corporation.

Question 4

A board of directors can delegate some functions to corporate officers.

Accepted Answer

According to corporate governance principles, a board of directors can delegate some functions or powers to corporate officers such as the CEO, CFO, COO, etc., who can then implement policies and strategies to run the company. However, the board remains responsible for reviewing and overseeing the actions of corporate officers to ensure that they align with the best interests of the company and its shareholders.

Question 5

A corporation's officers and other executive employees are hired by corporate shareholders.

Accepted Answer

Officers and other executive employees are typically hired by the board of directors, who are elected by the shareholders.

Question 6

A director usually serves on a corporation's board for a life term.

Accepted Answer

A director's term on a corporation's board varies depending on the company's bylaws and regulations. It can range from one year to multiple years, but it is not usually a lifetime term.

Question 7

Pursuing a new product line is a decision that would be made by shareholders.

Accepted Answer

Pursuing a new product line is a decision that would typically be made by the company's management team and CEO, who would present the proposal to the board of directors for approval. While shareholders may have input or may vote on important decisions, they are not typically the primary decision-makers when it comes to launching new product lines.

Question 8

A director can be elected by the other members of the board.

Accepted Answer

Yes, a director can be elected by the other members of the board. This is a common way in which directors are appointed to a board of directors.

Question 9

Quorum requirements are the same in all jurisdictions.

Accepted Answer

Quorum requirements can vary depending on the jurisdiction and the type of organization. Some jurisdictions may require a majority of members to be present for a quorum while others may require only a certain percentage or a specific number. It is important to consult the relevant laws and bylaws for the specific requirements in each situation.

Question 10

Corporate directors and officers are insurers of business success.

Accepted Answer

While directors and officers play a significant role in overseeing and guiding a company's success, they are not insurers of business success. There are numerous factors that contribute to a company's success or failure, including market conditions, competition, customer demand, and economic trends.

Question 11

A director does not need to disclose any conflict of interest before voting on a proposal.

Accepted Answer

A director has a legal and ethical duty to disclose any conflicts of interest before voting on a proposal as it can influence their decision-making process and potentially harm the organization. Failure to disclose can result in legal repercussions and damage to the director's reputation.

Question 12

Corporate officers can usually be removed by the board of directors without cause.

Accepted Answer

This is generally true for most corporations, unless the officer has a contract that specifies otherwise or there are restrictions under state law or the corporation's articles of incorporation or bylaws.

Question 13

The minimum number of members of a body of officials that must be present before business can validly be transacted is known as a quorum.

Accepted Answer

This statement is true. A quorum is the minimum number of officials who must be present at a meeting in order for business to be legally conducted.

Question 14

Directors can use corporate funds and confidential information for personal advantage as long as they disclose that they are doing so.

Accepted Answer

Directors have a fiduciary duty to act in the best interest of the corporation and its shareholders. Using corporate funds and confidential information for personal advantage, even if disclosed, may still be a breach of that duty and can lead to legal and ethical consequences.

Question 15

If a director fails to use a reasonable amount of supervision over corporate officers and employees,then the director can be held liable for negligence.

Accepted Answer

Directors have a duty to use a reasonable amount of supervision over corporate officers and employees. Failure to do so can result in the director being held liable for negligence.

Question 16

A board of directorsgovern every corporation.

Accepted Answer

Every corporation has a board of directors who are responsible for making major decisions and governing the company.

Question 17

Some states permit a corporate board to have fewer than three directors.

Accepted Answer

Some states, such as Delaware, allow corporations to have only one director on their board. Other states may require a minimum of three directors or more.

Question 18

After the first board,the directors are chosen by the corporate officers.

Accepted Answer

After the first board, the directors are usually elected by the company's shareholders, not the corporate officers.

Question 19

A director is a fiduciary of a corporation.

Accepted Answer

Directors have a fiduciary duty to act in the best interests of the corporation and its shareholders.

Question 20

The initial board of directors of a corporation is normally elected at the first annual shareholders' meeting by a majority vote of the shareholders.

Accepted Answer

The answer of The initial board of directors of a...

Quiz 25: Corporate Directors, officers, and Shareholders