Asked by ALDONA KEKELIA on Jun 24, 2024
Verified
Smith, a Director of Alfa Industries, discovered a business opportunity mentioned in a foreign magazine that would work well for Alfa in Canada. Rather than bring it up at the next directors' meeting, Mr. Smith takes advantage of it himself. He is in breach of his fiduciary duty to Alfa.
Fiduciary Duty
A duty to place a client’s interest above the professional’s own interests.
- Comprehend the ethical and legal obligations of board members concerning corporate prospects and interest conflicts.
- Comprehend the principle of corporate opportunity and its influence on fiduciary responsibilities.
Verified Answer
SB
Steven BoylanJun 27, 2024
Final Answer :
True
Explanation :
As a director, Mr. Smith has a fiduciary duty to act in the best interests of Alfa Industries. By taking the business opportunity for himself instead of presenting it to the company, he is breaching this duty.
Learning Objectives
- Comprehend the ethical and legal obligations of board members concerning corporate prospects and interest conflicts.
- Comprehend the principle of corporate opportunity and its influence on fiduciary responsibilities.
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