A Director or Officer Will Be Held to Have Failed

question 5

Multiple Choice

A director or officer will be held to have failed to act with due care and diligence if he/she:

• A)does not personally investigate every facet of every business decision.
• B)relies on the opinions or statements of others.
• C)fails to make a reasonable investigation before making any corporate decisions.
• D)he/she does not personally attend all board meetings even if insufficient notice is given.

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Definitions:

Incentives

Rewards or motivations provided to encourage specific behaviors or actions.

Learning

The method of obtaining new comprehension, knowledge, conduct, capabilities, beliefs, or inclinations.

Homeostasis

The process by which living organisms maintain a stable internal environment to function effectively, despite external changes.

Drive-reduction Theory

A theory of motivation that proposes an individual's behavior is an external display of the desire to satisfy physiological needs.