Directors and officers of corporations have been successfully sued for breach of their duty of loyalty and duty of care, resulting from negligence, error, or omission.

Question

Quizplus · Accepted Answer

Directors and officers of corporations have a fiduciary duty to act in the best interests of the corporation and its shareholders. This duty includes a duty of loyalty and a duty of care. If they act negligently or make errors or omissions that harm the corporation, they can be sued for breaching these duties. Therefore, the statement is true.

Directors and Officers of Corporations Have Been Successfully Sued for Breach