In the context of corporate powers and management, what is indemnification?
A) It is a situation where one person sits on the board of directors of two different companies.
B) It is a situation where directors of two different companies serve jointly on the board of a third company.
C) It is a lawsuit brought on behalf of the corporation by a shareholder when the directors refuse to act.
D) It is a method whereby a shareholder elects a representative, commonly another individual or a written document, through which the shareholder casts his vote at the annual meeting.
E) It is a method of protecting directors and officers whereby the corporation agrees to pay legal expenses incurred by the directors or officers.

Question

Quizplus · Accepted Answer

Indemnification is a method of protecting directors and officers whereby the corporation agrees to pay legal expenses incurred by the directors or officers. This provides a level of assurance to directors and officers that their personal finances will not be at risk if they are sued in connection with their duties to the corporation.

In the Context of Corporate Powers and Management, What Is