Chapter 48 Corporate Management

Basic structure of management
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a rule that protects directors from personal liability from their negligent acts or omissions in exercising corporate governance
-you get in trouble as a director for 1. malfeasance (misconduct) 2. nonfeasance (not showing up for meetings)
-major area in corporate governance bc movement about loosening rules to make lawsuits easier on directors
-Ford Edsel: people thought it looked like a face sucking a lemon. Controversial in view of public, bad quality control
-Coke in the 80s: changed formula bc people liked Pepsi better = bad plan because they had such a strong brand. Public pushback was so bad & shareholders were mad -> shareholder meeting to discuss issue
-Disney suit, golden parachute, huge shareholder derivative suit
Corporate officers can be held criminally liable under some federal and state statutes. Responsibility sometimes attaches when the "responsible officer" fails to follow appropriate regulations
-being held criminally liable vicariously MEANS you're being held criminally liable for someone else's actions
-EX. 3 ppl: forklift driver, general manager who gave orders, and VP for environmental issues. GM gives order to driver to dump waste on road. Driver and GM are guilty, plus office supervisor guilty for negligence
Liability to third personsFault of one venturer will be imputed to the others- directors and officers generally not liable -Exceptions: personal tortious actions (always responsible for things you do yourself), fraud, securities act of 1933