Cauldron, Inc., has written policies and procedures regarding the disposition of surplus, obsolete, and defective inventory. These policies provide for discarding all surplus, obsolete, and defective inventory by destroying it prior to removing it from the plant. All employees are required to read the employee handbook annually and sign a statement that they have read it. Several years ago, a child was injured because an employee was selling old inventory online without disclosing that it was potentially hazardous. After that incident, the board of directors ordered an investigation, which determined that the company had a culture of savings over safety. The board of directors then directed management to implement tighter security measures for proper disposition of obsolete inventory. The board also created a board committee to monitor risks including safety issues. This year a similar incident occurred when a child was injured while playing with defective inventory purchased online from an employee of Cauldron, Inc. The board of directors ordered an investigation by an outside, impartial firm and discovered that management had never developed or implemented additional security measures.

Select from the option list provided the correct ending to each statement below. Each choice may be used once, more than once, or not at all.

1. The primary responsibility of shareholders is to elect

2. The term for a director's relationship to the corporation is

3. Serving on the board of a competitor may violate a director's duty of

4. A written authorization to vote another person's shares is called a

5. Rights to subscribe to a new issuance of shares are called

6. Shareholders must approve removal of

7. The rule that protects an officer or director from personal liability for acts performed in good faith is called

8. The decision to purchase assets of another corporation is the responsibility of