A duty that directors and officers have not to act adversely to the interests of the corporation and to subordinate their personal interests to those of the corporation and its shareholders is known as ________.

Question

Quizplus · Accepted Answer

The duty of loyalty is the duty that directors and officers have not to act adversely to the interests of the corporation and to subordinate their personal interests to those of the corporation and its shareholders. It requires that they act in good faith, with undivided loyalty, and in the best interests of the corporation. The duty of care relates to the duty to act with the care that a reasonable person in a similar position would exercise under similar circumstances, while the duty of obedience relates to the duty to act within the scope of the corporation's lawful authority. Self-dealing is a situation where a director or officer puts their own personal interests ahead of the interests of the corporation.

A Duty That Directors and Officers Have Not to Act