Role of Directors in a Corporation

The video tutorial discusses the role and responsibilities of corporate directors. Directors are responsible for making high-level management decisions, which may require shareholder approval in significant cases like mergers. They must stay informed, act with care and loyalty, and demonstrate ethical behavior. The duties of care and loyalty are crucial, with the business judgment rule raising the standard of care. Directors' primary functions include voting on budgets, appointing officers, and overseeing governance processes. They also handle disclosure requirements to ensure transparency with shareholders and the public.

What is one of the key responsibilities of directors when it comes to high-level management decisions?

• Approving operational plans and strategic initiatives

• Managing day-to-day operations

• Hiring all employees

• Setting employee salaries

In what situations might directors need to seek shareholder approval for their decisions?

• For routine budget approvals

• When setting daily operational goals

• For mergers, acquisitions, and divestitures

• When hiring new employees

What does the duty of care require directors to do?

• Ignore shareholder concerns

• Prioritize personal interests over the corporation

• Act as a reasonable director would under the circumstances

• Make decisions without any research

What is the duty of loyalty for directors?

• To prioritize personal gain over corporate benefit

• To avoid taking corporate advantages for themselves

• To focus solely on short-term profits

• To disregard ethical considerations

Which of the following is a primary function of the board of directors?

• Managing daily employee tasks

• Overseeing elections and ensuring compliance with disclosure requirements

• Setting individual employee goals

• Handling customer service issues