The Fair Corporation has been having difficulty in recruiting people to serve on
ID: 336349 • Letter: T
Question
The Fair Corporation has been having difficulty in recruiting people to serve on the Board of Directors ever since a major court case in the state where its principal place of business is located held the board and officers personally liable in a tort case pertaining to a public safety issue. The Fair Corporation's insurance company has recently re-written the errors and omissions Directors & Officers policy so that the cost of such insurance is prohibitively expensive. The Fair Corporation's Board of Directors proposed amending the Articles of Incorporation to permit the corporation to defend and indemnify its directors and officers even if they are found to be liable for a tort or crime but the shareholders, led by a shareholder to submitted a resolution and then obtained the proxies of the majority of the other shareholders, refused to approve such amendment. In the absence of such an amendment, what is the Fair Corporation's best hope for recruiting new board members?
The Fair Corporation can lobby the legislature of its principal place of business to allow the directors and officers of a corporation to include a protectionist provision in the bylaws rather than the articles.
The Fair Corporation can relocate to a state such as Texas which is encouraging companies to bring business to the state and is known to be "business friendly."
The Fair Corporation is incorporated in Ohio and it does not matter what the shareholders want.
The Fair Corporation is incorporated in a state such as Virginia that allows for a cap on monetary damages.
a.The Fair Corporation can lobby the legislature of its principal place of business to allow the directors and officers of a corporation to include a protectionist provision in the bylaws rather than the articles.
b.The Fair Corporation can relocate to a state such as Texas which is encouraging companies to bring business to the state and is known to be "business friendly."
c.The Fair Corporation is incorporated in Ohio and it does not matter what the shareholders want.
d.The Fair Corporation is incorporated in a state such as Virginia that allows for a cap on monetary damages.
Explanation / Answer
The answer is given below:
b. The Fair Corporation can relocate to a state such as Texas which is encouraging companies to bring business to the state and is known to be "business friendly".
Texas had been a business friendly environment, so that the company can shift which would avoid on damaging on public environment.
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