Directors Who Are Not as Directly Connected to the Firm

question 5

Multiple Choice

Directors who are not as directly connected to the firm but who have existing or potential business relationships with the firm are called

• A) Gray Directors.
• B) Independent Directors.
• C) Advising Directors.
• D) Inside Directors.

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Definitions:

Bilateral Contract

An agreement where each of the two parties makes a promise or set of promises to the other, creating mutual obligations.

Promissory Estoppel

A legal principle that prevents a party from withdrawing a promise made to another party if the latter has relied on that promise to their detriment.

Stock Option

A financial instrument granting the holder the right, but not the obligation, to buy or sell a stock at an agreed-upon price within a certain period.

Detrimental Reliance

A legal principle where a party suffers harm by relying on a misleading statement or promise of another.