Board of Directors

Question 1

Board of Directors Meetings

Answer 1

• Special meetings: require 2 days written notice (purpose of meeting doesn’t have to be specified)
• Regular meetings: No notice required

Quorum is need at all meetings (quorum # can be changed in the bylaws, but can never go below 1/3)

Question 2

Action Without Meeting

Answer 2

Directos can agree to UNANIMOUS WRITTEN consent to a specific board action

Question 3

Directors & Extraordinary Ks

Answer 3

a director DOES NOT have the power to bind the corporation on extraordinary contracts unless there is actual authority to act

Question 4

Actual Authority to Act

Answer 4

(1) proper notice was given for a directors’ meeting,
(2) a quorum was present, and
(3) a majority of the directors approved the action

Question 5

Directors’ Fiduciary Duties

Answer 5

A. Duty of Care
B. Duty of Loyalty

• duty owed to corporation & shareholders
• officers also have these fiduciary duties

Question 6

Duty of Care

Answer 6

Duty to not be grossly negligent and be informed.
- subject to the business judgment rule

Question 7

Duty of Loyalty

Answer 7

aka conflict of interest
- when a director (or immediate family) will benefit from one of their votes or board action

Conflicted Director Must:
(i) disclose conflict to Board; and
(ii) once disclosed, Board can continue as long as it is approved by a majority of the disinterested Directors

Question 8

Corporate Opportunity Doctrine

Answer 8

Relates to a business opportunity that a Director learns of that the corporation might be interested in
- Director has obligation to disclose it to the corp first
- if Corp declines –> Director can take it
- if Director doesn’t disclose –> can be liable, including for profits missed out on