Jack, Bill and George are the only directors of Sand and Snow Ltd (S&S), a company that sells surfing and snowboarding holiday packages. They each own 10% of S&S's shares. The remainder of the shares are owned by George's father, Barry, who owns 15% of S&S's shares, and other members of Barry's large extended family.

(a)After a tsunami devastates much of the Queensland coastline, the S&S board announces that it will be donating $5 million to the relief effort.Barry complains that this is a misuse of shareholder funds. Discuss.

(b)(b) S&S is about to purchase a significant amount of inventory from a company called Bill's Snow Gear Pty Ltd.Bill owns 60% of Bill's Snow Gear Pty Ltd's shares.What would you recommend Bill do before S&S enters into the transaction?