If a Director Makes a Decision That Inadvertently Harms the Company

question 29

True/False

If a director makes a decision that inadvertently harms the company, shareholders can hold the director liable for the bad decision under all circumstances.

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Definitions:

Common-Law Countries

Countries that follow a legal system originating in England, characterized by the doctrine of precedent, under which the outcomes of legal proceedings can be influenced by previous court decisions.

IFRS

International Financial Reporting Standards, a set of accounting standards developed by the International Accounting Standards Board (IASB) that serve as a global framework for preparing financial statements.

Accounting Standards

Rules and guidelines set by regulatory bodies that determine the framework for financial reporting and accounting practices.

Private Companies

Companies owned by individuals or groups that are not traded publicly and whose shares are not available on the stock market.