The requirement of board member good faith
Posted on Tuesday, January 26th, 2010 at 3:00 am
Both public and private businesses often appoint a board of directors. This board is meant to make corporate decisions that are in the best interests of the company and its shareholders.
Given this authority, both CEOs and board members are expected to act in good faith. This means that they are not allowed to make deicisions that would benefit their interests at the expense of shareholder interests.
While shareholders are protected by many common law provisions, the federal government has also passed specific provisions to govern corporate board behavior for public companies. These provisions include restrictions on loans between companies and their board members, as well as disclosure requirements for financial statements.
If you are a shareholder who believes that your company's board members have not acted in good faith, contact the Des Moines business attorneys of LaMarca Law Group, P.C., at (877) 327-2600.