Punam Was the Director of a Broadly Held Corporation That

question 147

Multiple Choice

Punam was the director of a broadly held corporation that made educational software. Without the knowledge or consent of the board of directors, Punam started a competing business that she ran from home. Which of the following is true?

• A) Punam has breached a fiduciary duty owed to the corporation.
• B) Punam is only a director, so she owes no special duty to the corporation.
• C) Punam can compete with the business, as long as she doesn't use confidential documents belonging to the corporation.
• D) Punam owes the shareholders of the corporation a fiduciary duty, so they could sue her if they suffer a loss.
• E) Whether or not Punam can compete with the business depends on whether her written contract prohibits it.

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Definitions:

Local United Way

refers to a community-based branch of the United Way, a nonprofit organization that collaborates with volunteers and local charities to address community needs.

Social Responsibility

The obligation of businesses and individuals to act in a way that benefits society at large, beyond their own interests or profitability.

Business Ethics

Guidelines and principles that govern the conduct and decision-making process within a business environment.

Internal Force

Forces within an organization that affect its operations, such as employee motivation, company culture, and internal processes.