Question
Tina Newhouse was invited to become a director of Turnquist State Bank because of her fine reputation as a public accountant. While serving on the
Tina Newhouse was invited to become a director of Turnquist State Bank because of her fine reputation as a public accountant. While serving on the board for a year, Tina learned that a bank director is required to use care and prudence in administering the affairs of the bank and failure to do so in such a way that the bank suffers a financial loss means that the director(s) may be held liable for damages. On February 1, 2023, in the course of an audit, Tina discovers that Pellino Associates has a seriously weakened financial position. Pellino also has a loan representing 20% of its total assets from Turnquist State Bank. Prompt disclosure to the other bank directors would minimize the banks loss, however, the audit report will not be publicly available until March 15, 2023. The agenda for the February 28, 2023 board of directors meeting includes the approval of another loan to Pellino for 15% of its total assets.
A) Identify a plausible course of action for Tina.
B) Provide appropriate support for the course of action by identifing and explaining how it provides the greatest good for the individuals involved.
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