Themis Essay 3208

Question 1

A director owes a duty of care to

Answer 1

the corporation.

Question 2

A director is not liable for a breach of the duty of care if

Answer 2

the director’s conduct was undertaken in good faith, which is a subjective standard.

Question 3

Virginia’s statutory business judgment rule protects a director’s decision if

Answer 3

the decision was made with good faith business judgment in the best interests of the corporation.

Question 4

To overcome a director’s business judgment rule protection, the party challenging the director’s conduct bears

Answer 4

the burden of persuasion, which generally requires a showing that the director engaged in self-dealing or fraud or acted in bad faith.

Question 5

The board of directors may generally act through one or more

Answer 5

committees, each of which must consist of at least two directors.

Question 6

A director is entitled to rely on the performance, information, opinions, reports, and statements supplied by a

Answer 6

committee of the board of which the director is not a member, if the director believes, in good faith, the committee merits confidence.

Question 7

A director owes a duty of loyalty to

Answer 7

the corporation.

Question 8

In Virginia, subject to the business judgment rule, a director may not directly or indirectly take a personal advantage from a transaction with the corporation, unless

Answer 8

the transaction is “open, fair, and honest,” and competent counsel represents the corporation.

Question 9

A director can breach the duty of loyalty by usurping a corporate opportunity, unless

Answer 9

the director first makes the corporation aware of it.

Question 10

A corporate opportunity is

Answer 10

a proposed activity that is reasonably incident to the corporation’s present or prospective business in which the corporation has a capacity to engage.