Question
Duties of Corporate Directors. The firm is incorporated as Digital Software, Inc. (DSI). The software is developed and marketed successfully, and DSI prospers. John, Mary,
Duties of Corporate Directors. The firm is incorporated as Digital Software, Inc. (DSI). The software is developed and marketed successfully, and DSI prospers. John, Mary, and Paul become directors of DSI. At a board meeting, Paul proposes a marketing strategy for DSI's next product, and John and Mary approve it. Implementing the strategy causes DSI's profits to drop. If the shareholders accuse Paul of breaching his fiduciary duty to DSI, what is Paul's most likely defense? If the shareholders accuse John and Mary of the same breach, what is their best defense? In either case, if the shareholders file a suit, how is a court likely to rule?
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