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Board Of Directors Duty

Gwen and Gale are very concerned about a $200,000 budget line item called "AlbMoneyForFun." Based on this discovery and their observation of Stewart and Ken, it appears that there is a misappropriation of funds. Should Gwen and Gale pursue this issue?
The Duty of Loyalty requires that they act in good faith and in a way that they believe is in accordance with the best interests of WCOIYP, Inc. They have a belief that misappropriation is going on and it is a reasonable belief that a reasonable person could have in their circumstances. Why would a CEO make all the presentations concerning the budget when clearly this is a CFO's field of expertise?
Negligence is also an issue here. However, in order to prove negligence, several things must be established. There must be a duty owed. In this case, it would be a duty to the corporation. The Duty of Care and Duty of Loyalty would most likely be used in this case. The scope of the duty, causation, and damage flowing from......


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Approximate Word Count: 699
Approximate Pages: 3 (250 words per double-spaced page)

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