A __________ statute is a state statute authorizing boards of corporations to take into account all stakeholders and constituencies even when a change in control or breakup of the corporation has become inevitable.

Question

Quizplus · Accepted Answer

A constituency statute recognizes that corporations have a responsibility to consider the interests of all stakeholders, including employees, customers, and the community, when making decisions about changes in ownership or structure. This is in contrast to a corporate control statute (A) which prioritizes the interests of shareholders over other stakeholders, and a break-up statute (B) which focuses on the process of dismantling a corporation. A protection statute (D) does not necessarily relate to the issue of stakeholder consideration in corporate decision-making.

A __________ Statute Is a State Statute Authorizing Boards of Corporations