What is the primary fiduciary responsibility of a company's board of directors?
Correct answer: B. To act in the company's best interests with care and loyalty
- A. To protect the board members from all business losses
- B. To act in the company's best interests with care and loyalty
- C. To guarantee investors a fixed annual return
- D. To manage every routine operational task personally
Explanation
Directors owe duties of care and loyalty to the company. They must make informed decisions and avoid using their position for improper personal benefit.
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About Business Ethics and Corporate Governance
Business ethics applies principles such as honesty, fairness, responsibility and transparency to decisions involving employees, customers, investors, competitors and society. Corporate governance covers the board of directors, accountability, disclosure, internal controls, stakeholder interests, agency conflicts, corporate social responsibility, codes of conduct and whistleblowing.
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