College of
Business
Administration
College of
Business
Administration
1) What are the benefits and costs of Audit Committees?
2) Based on the following, what do you conclude are the legal responsibilities of Directors?
"All corporate powers shall be exercised by or under authority of, and the business and affairs of the corporate managed under the direction of, its board of directors...."3) Define the following terms:Duty of CareAre there potential conflicts between these two constructs?
Duty of Loyalty4) What do you conclude a Director's responsibility to non-shareholder constituencies to be, based upon the following:
"...the director should also be concerned that the corporation conducts its affairs with due appreciation of public expectations, taking into consideration trends in the law and ethical standards...pursuit of the corporation's economic objectives may include consideration of the effect of corporate policies and operations upon the corporation's employees, the public, and the environment."How does this statement 'fit' with the notion of social contract theory?5) How far does the Director's 'right to rely on others' extend?
6) What are the three components of the business judgment rule?
7) Are conflicts of interest inherently improper? Why or why not? How can such conflicts be avoided?
8) What is the definition of an 'independent director'? What is the importance of this concept?
9) What are the rights of Directors, and what are the corresponding duties for other related parties?
10) Can Directors discharge their duty by delegating to committess (such as the Auditing Committee)?
11) How involved should Directors be in the establishment and operation of corporate Codes of Conduct?
12) With regard to insider trading, Directors are forbidden by law from purchasing or selling securities when they possess "undisclosed material information."
What constitutes 'material' information?
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