Matrix Corporation's Board of Directors Decides Not to Outsource Its

question 52

Multiple Choice

Matrix Corporation's board of directors decides not to outsource its U.S.jobs to China,even though it would cut labor costs by fifty percent.Shareholders subsequently sued the directors for failing to maximize profits.Under the traditional view,the directors would be:

• A)absolutely immune from any liability to the shareholders.
• B)absolutely liable to the shareholders.
• C)liable to the shareholders,unless they can prove their decision not to outsource was made with the shareholders' profits interest above all other interests.
• D)criminally liable,unless granted immunity by a federal prosecutor.

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Definitions:

Goods In Bailment

Purchased goods that are in some kind of storage under the control of a third party, such as a warehouseman.

Storage

The action or method of storing goods, data, or information for future use.

Physical Possession

The actual holding or control of property, as opposed to constructive possession which is the legal right to control.

Insurable Interest

The legitimate interest or stake a policyholder must have in the subject matter of the insurance policy, such that they would suffer financial loss or damage from its harm or destruction.