Explore the legal terms and concepts related to Directors and Officers. Click on any term below to learn more about its definition and applications.
Who decides whether a corporation will indemnify a director or officer?
A decision regarding indemnity can be made by (1) a majority of independent directors, (2) a committ...
What are some common examples of permissive indemnification?
The corporation may indemnify a director or officer held liable to a third party if the director or...
Can a corporation indemnify an officer or director who successfully defends themselves against a lawsuit from another party?
Yes. A corporation must indemnify a director or officer where they successfully defend themselves in...
Can a corporation indemnify an officer or director who is held liable to their own corporation?
No. A corporation may never indemnify a director or officer who is held liable to their own corporat...
When do officers and directors often seek indemnification?
A director or officer often seeks reimbursement from the corporation where he has incurred costs, at...
What duties do officers have to the corporation and shareholders?
Officers owe the same duties of care and loyalty as directors, and are agents of the corporation wit...
How can a director defend against a claim that they breached their duty of loyalty?
Directors may defend a claim of breach of their duty of loyalty by obtaining independent ratificatio...
What is the duty of loyalty?
The duty of loyalty is a director's obligation not to place their own interest ahead of the corporat...
What is the business judgment rule?
Directors are not liable for innocent mistakes that turn out badly. The business judgment rule is a...
What is the duty of care?
Directors must act (1) in good faith, (2) with the care that an ordinarily prudent person in a like...
What is the duty to manage?
Directors must manage the corporation. However, they may delegate management functions to a committe...
What duties do directors have to the corporation and shareholders?
Directors have a (1) duty to manage, (2) duty of care, (3) duty of loyalty, and (4) duty to disclose...
What are the statutory requirements of board of directors meetings?
There must be a valid meeting for all board of directors' actions, unless all directors consent in w...
What are the statutory requirements of directors?
Corporations must have a board of directors with at least one member. The shareholders elect directo...
What is the duty to disclose?
Directors have a duty to disclose material corporate information to other members of the board.
