Is it ethical for directors to include a waiver of liability for shareholder suits , law homework help

2 questions 3~5 sentences each.

  • The ethical dilemma surrounding waivers of liability for shareholder suits can be argued either way. One could argue that it is not sound public policy for courts to recognize a limited liability provision charter because directors are charged with the responsibility to not only appoint officers but also to oversee the corporation. In this context, it only makes sense that they should not be able to waive liability for shareholder suits because they would essentially be accepting limited responsibility for their very role in the corporation. Conversely, there are equitable concerns that can be argued to support limited liability provisions in charters.

Question 4: Is it ethical for directors to include a waiver of liability for shareholder suits in their corporate charter? Is it sound public policy for courts to recognize a limited liability provision in a charter? Why or why not?

  • Tammy joined the board of directors of her local Wounded Warriors charitable organization which is established as a nonprofit corporation. Tammy didn’t have any experience in legal or business issues relating to management or fund raising but was an excellent fundraiser and often hosted functions at her brother’s event hall raising significant amounts to benefit the charity. She made sure that all the proceeds of the events, after paying her brother a discounted customary rate for an event, went directly to help veterans. The proceeds typically were used to provide service animals like guide dogs or companionship pets, and Tammy made sure to use the local charitable foundation to obtain the animals. She was familiar with that organization as she also serves on its Board of Directors as well, making sure reasonable and fair costs are reimbursed to animal foundation for the services provided.

Question 5: Can you give Tammy some advice her duties as a board member of a non-profit. Specifically, explain any issues that you may see in her serving on related boards, on compensating one organization from the other, on using raised funds to pay for services from a family business and any other issues you see.

 
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