Asked by Nayely Quintero on Jun 03, 2024
Verified
What is the standard applied to examine managers' duty of care?
A) The degree of care expected from an intelligent person faced with a complex problem.
B) The care expected from a shopkeeper while selling expensive goods.
C) The care expected from an ordinarily prudent person in similar circumstances.
D) The degree of care expected from a prudent businessperson during economic downturn.
Duty Of Care
A legal obligation to avoid acts or omissions that could likely cause harm to others.
Ordinarily Prudent Person
A legal standard that represents how a typical, reasonable person would act in certain circumstances, usually used to determine negligence.
- Gain insight into the foundation and effects of the business judgment rule as it pertains to the defense of corporate directors.
Verified Answer
CW
Clara WaldonJun 10, 2024
Final Answer :
C
Explanation :
Managers need merely meet the standard of the ordinarily prudent person in the same circumstances,a standard focusing on the basic manager attributes of common sense,practical wisdom,and informed judgment.The duty of care does not hold directors and officers to the standard of a prudent businessperson,a person of some undefined level of business skill.
Learning Objectives
- Gain insight into the foundation and effects of the business judgment rule as it pertains to the defense of corporate directors.