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Please read case and answer the questions below. (1-2 paragraph answer for each question) McQuade was the manager of the New York Giants baseball team.

Please read case and answer the questions below. (1-2 paragraph answer for each question)

McQuade was the manager of the New York Giants baseball team. McQuade and John McGraw purchased shares in the National Exhibition Co., the corporation that owned the Giants, from Charles Stoneham, who owned a majority of National Exhibition's stock. As part of the transaction, each of the three agreed to use his best efforts to ensure that the others continued as directors and officers of the organization. Stoneham and McGraw, however, subsequently failed to use their best efforts to ensure that McQuade continued as the treasurer and a director of the corporation, and McQuade sued to compel specific performance of the agreement.

A court reviewing the matter noted that McQuade had been "shabbily" treated by the others but refused to grant specific performance on the ground that the agreement was void because it interfered with the duty of the others as directors to do what was best for all the shareholders. Although shareholders may join to elect corporate directors, they may not join to limit the directors' discretion in managing the business affairs of an organization; the directors must retain their independent judgment.

Is it ethical to put the business judgment of the directors ahead of an otherwise valid promise they made?

How can directors perform the tasks dictated to them if their judgment is constrained by earlier agreements with some of the shareholders?

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