The directors of Z Corp. have ignored the warnings and citations issued to the company by a government regulator for several years. Even though the company has eliminated director liability for violating the duty of care, the directors may be liable for breaching the:

Question

Knight

Business

1 May, 09:20

The directors of Z Corp. have ignored the warnings and citations issued to the company by a government regulator for several years. Even though the company has eliminated director liability for violating the duty of care, the directors may be liable for breaching the:

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Answers (2)

Know the Answer?

Adyson Owen · Answer 1

Duty of obedience

Explanation:

The fiduciary duties of the board of directors include the duty of care (which was eliminated by the company), but it also includes the duty of loyalty and obedience to the corporation.

The duty of obedience means that board members must make sure that the corporation follows all applicable laws and regulations. If they are ignoring warnings and citations, the corporation is obviously not following all the laws and regulations.

Mason Hunter · Answer 2

Duty of care and oversight

Explanation:

Though the liability due to carelessness is waived off but the directors are liable for duty of care and duty of oversight of companies issues and they must act in the best interest of shareholders. This carelessness will result in heavy fines which the shareholders will have to bear. So the director is liable for his misconduct.