The Duty of Care Self-Quiz








Junior is a director of MA Manfr. Co. Which of the following is not an automatic right of Junior as a director?

Choice 1 Participation
Choice 2 Inspection of books
Choice 3 Compensation
Choice 4 None of the above
James and Dolly are directors of Madison Properties, Inc. Voting by James and Dolly at corporate directors’ meetings:
Choice 1 must be done in person
Choice 2 does not require that a quorum of directors be present
Choice 3 may be done by proxy in all states
Choice 4 may be cumulative
William is a director of Harrison Lumber, Inc. Under the standard of due care owed by directors of a corporation, William must:
Choice 1 attend meetings and use perfect judgment
Choice 2 attend meetings and inspect corporate records
Choice 3 carry out his responsibilities in an informed, businesslike manner
Choice 4 not mismanage the corporation
The standard that a director must adhere to when carrying out her work as the director of a company in order to meet her Duty of Care is equivalent to that which would be carried out by:
Choice 1 A CPA or a lawyer
Choice 2 A financial expert
Choice 3 The average director
Choice 4 The ordinarily prudent person
Tommy is a lawyer extremely skilled in the area of antitrust work and litigation. He is also a director of ComuniCo. Recently, Tommy has been very busy at work and has not been able to make any of the company’s board meetings. In his absence, the company engaged in a transaction that subsequently got them in trouble with the FCC over an antitrust violation. The action with the FCC cost a great deal of money and resulted both in the unwinding of the transaction and a shareholder suit against the company. If the shareholder chose to sue Tommy in particular for his actions, a court may find Tommy guilty of:
Choice 1 Neglect
Choice 2 Nonfeasance
Choice 3 Misfeasance
Choice 4 Abuse

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