A . Who selects the officers of a corporation under most state corporate statutes? Who removes them? Explain. b. What duties do the officers and directors of a corporation owe to the corporation? Explain

Answer 1

a . Under most state statutes, the officers of a corporation are both selected and removed by the board of directors. Though shareholders can voice their disapproval in a particular officer, the only people with the authority to select and remove officers are board members (when they act as a unit).
b. Directors and officers owe the duties of obedience, diligence, and loyalty to the corporation. The duty of obedience involves the directors and officers acting within their respective authority. The duty of diligence means the directors and officers must exercise ordinary care and prudence. The duty of loyalty is a fiduciary duty to the corporation and to its shareholders. Directors and officers are obligated to be honest and to use prudent business judgment in the conduct of corporate affairs. They are also expected to attend board meetings and become informed on corporate matters. Officers and directors must disclose fully any corporate opportunity or any possible conflict of interest that may arise in any transaction. Over and above all these duties, officers have the duty of managing daily business affairs in the corporation's best interest.