Director's Fiduciary Duties

Question 1

Director’s Fiduciary Duties

Answer 1

Loyalty, Care

Question 2

Duty of Loyalty

Answer 2

Corporation interest must be placed above the director’s personal interest

Question 3

Duty of Care

Answer 3

Care ordinary prudent person would exercise in similar circumstances.

Question 4

If Director has a conflict of interest he must:

Answer 4

fully disclose and abstain from voting.

Failure will result in transaction being rescinded and profit recovered from director UNLESS director proves it is fair to the corporation.

Question 5

Defenses to Duty of Loyalty/Care

Answer 5

Dissentted from board action, absent from board meeting, ratification by shareholders, reliance on expert advise.

Question 6

Corporate Opportunity Doctrine

Answer 6

Director taking business related to corporation for himself.

Question 7

Liability Protectors

Answer 7

Business Judgment Rule AND Liability Limitations in Articles.

Question 8

Business Judgment Rule

Answer 8

Rebuttable presumption that directors act in conformity with their duties