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Scott Was a Member of the Board of Directors of Buffalo

Question 3

Multiple Choice

Scott was a member of the board of directors of Buffalo Corporation. Officers of Buffalo were considering the purchase of new equipment to produce a new product. The board of directors had not been consulted about the new venture, but Scott found out about the plan and objected to its implementation. He sought to inspect the corporate books and records to gain factual information supportive of his position. The officers refused his inspection request, asserting that Scott had no management function or power. Under these circumstances, Scott:


A) is barred from examination of the books and records of the corporation under the business judgment rule.
B) has the right to inspect corporate books and records, as information regarding the corporation and its affairs is essential to perform his duties.
C) is barred from examination of the books and records of the corporation under the doctrine of respondeat superior.
D) has the right to inspect corporate books only if he is also a majority shareholder.

Correct Answer:

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