Corporate Governance: The Jack Wright Series (2) Legal Obligations of Directors

This case provides for a discussion of the legal obligations of directors and their role in our corporate/capitalist system of corporate governance. Excerpt UVA-OM-1084 Rev. May 10, 2011 CORPORATE GOVERNANCE: The Jack Wright Series (2) Legal Obligations of Directors Introduction As Jack Wright weighed the invitation to join the Mega Corporation board, he reflected on how his personal career had flourished and the ways in which his stature in the community had risen steadily over the years. As a result, he had been asked several years previously to become an organizer/director of a de novo community bank, the shares of which would be listed on NASDAQ after its charter was granted by the Federal Reserve. This was Wright's first opportunity to become a director of a publicly held company, and he had readily agreed to join the organizers, a prestigious group of successful, civic-minded people. Wright knew most of the organizers, though not all of them. He was currently facing an unexpected and difficult problem in connection with that attachment. . . .