Legal Flashcards
What fiduciary duties are board directors obligated to?
Loyalty, obedience, care
Which fiduciary duty is an obligation to act only in the best interests of the organization and avoid conflicts of interest?
Duty of loyalty
Which fiduciary duty requires a board member to pursue the objectives of the organization’s purpose or mission (as defined in the bylaws)?
Duty of obedience
Which fiduciary duty requires board members to pay attention to the management and operations of the organization?
Duty of care
What is the Business Judgement Rule?
The presumption that in making a decision, the board members acted on an informed basis, in good faith, and in the honest belief that the action was taken in the best interest of the organization.
Board members that make decisions on an informed basis with good intentions for the organization are protected by what rule?
The Business Judgement Rule
What fiduciary duty is addressed by a conflict of interest policy?
Duty of loyalty
Does fiduciary duty prevent a board member from serving on 2 boards at the same time.
Not necessarily. This is OK provided that they do not take any action that favors one organization over the other, or results in harm to one of the organizations.
What documents must be filed with the state to formally incorporate an organization?
Articles of Incorporation
