Who Is Roger, Under Duty Of Good Faith And Loyalty?

562 Words2 Pages


By: Hazel Medina

FSCJ – Fall 2017
BUL 3130
Professor Bob Allen

Roger Vs Shareholders Roger, under duty of good faith and loyalty, had convinced the company’s board to design, build, and market sport utility vehicles. After the company hired a committee and a marketing consultant to do some research, they have learned that the market might be able to support the project. The board had voted and was in favor of the plan. Unfortunately, shortly after the vehicle was introduced, due to a major oil supply disruption the price of crude oils increased almost three-folds. Because of this unforeseen event, the company lost considerable amount of money for that the new vehicles only had a few purchasers. The shareholders filed suit against Roger as they claim that he had violated his duty to the corporation by convincing the board to build and market large SUV’s. …show more content…

Duty of good faith is generally defined as honesty in person’s conduct during the agreement (Kelly, 2016). Duty of loyalty is when the appointed director must act in good faith and with consciousness, fairness, morality, and honesty that the law requires fiduciaries (The duty of loyalty, n.d.). As one of the few remaining companies that has yet to introduce a sport utility vehicle, Roger decided to convince the board to form a new division. As it was stated on the key fact, the final decision was not on his own but was brought up for judgement. The vote was 9 to 6 in favor to move forward with the plan. The corporate directors have a fiduciary duty of trust and confidence to its appointed leaders. Roger, as the director, was liable for his decisions, but is not liable because of unknown circumstances. The major oil supply disruption was out of his control. Directors are chosen to lead success of an

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