Which One of the Following Is an Example of Breach

question 97

Multiple Choice

Which one of the following is an example of breach of fiduciary duty?

• A) The directors of the corporation refuse to give a pay raise to the employees although they had not received a pay raise for five years.
• B) A director profited $120,000 from a contract between the corporation and a firm in which he had an interest after he made full disclosure of his interest to the board of directors and abstained from the vote on the contract.
• C) An officer of the corporation learned of a business opportunity intended for the corporation and intercepted it for his own benefit.
• D) The directors refused to declare a dividend, contrary to the request by its preferred shareholders.
• E) A shareholder owning 2% of the outstanding shares started a business in direct competition with the corporation in which he held shares.

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Definitions:

Home Country Laws

The regulations and legal framework that govern the operations of businesses and individuals within a country's borders.

Sweatshops

Businesses that employ workers at very low wages for long hours in poor working conditions.

Executives

Senior-level employees responsible for making decisions and managing the operations within an organization.

Transnationals

Companies that operate on a global scale, transcending national boundaries in their business operations and strategic planning.