Question

1-What are the responsibilities/duties of the Board of Directors in acting to protect the shareholders of a publicly traded company?

2-Why do you think that Directors should have these duties?

3-Do you believe that shareholders should be allowed to file lawsuits against members of the board if they feel the board member has not done a good job in making the corporation profitable? Why or why not?

Answer 1

1- Board of Directors have fiduciary duty on behalf of shareholders in running the company. This duty can be defined as duty of care and duty of loyalty.They have all the authority is running the company and choose the executives of the company. Every decision which are important have to be taken by the consent of the board. Hence it can be said that they have more duties and responsibilities in protecting shareholders value by successfully running the company.

2- Directors are elected through democratic process by the shareholders. They have the trust of the shareholders to run the company. They have these duties because they have the position to influence decision of the company.I think director should have more duties to protect the value of shareholders.

3- I don't believe in filing lawsuit. Business is unpredicted and the decision taken by the board is for the best interest of the company and if any adverse situation happen then the business suffers loss.If any concrete evidence found that directors have wilfully not taken teh best decision at that time lawsuit should be filled. All these are subjective and vague expression also, so it will be difficult for the court to establish the evidence and concrete proof.