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a) Explain the primary role of a board of directors and one of its responsibilities. b) Explain why LFC would want to create a board of directors.

a) Explain the primary role of a board of directors and one of its responsibilities. b) Explain why LFC would want to create a board of directors.

Understanding Business
Understanding Business
12th Edition
ISBN:9781259929434
Author:William Nickels
Publisher:William Nickels
Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
Section: Chapter Questions
Problem 1CE
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Question 1 Mark's Cattle Company (MCC) is a 20-year-old family operation, and all shares are held by Mark and Krystina Heard and their five children. Mark developed a revolutionary feed system for storage and distribution of feed to the cattle through the winter months with NO spoilage and even distribution among the herd. The feed system has gained industry notice, as Mark has demonstrated its functionalities to other cattle farmers. MCC has received an offer from Limenez Farm Corp. (LFC), a public company. LFC has offered to purchase a 40% interest in MCC for $5,000,000. As part of the offer, LFC has requested that MCC create a board of directors with a maximum of five seats, two of which will be held by individuals nominated by LFC. Mark is unsure why a board of directors would be useful and who the Heard family would want in its three seats. Required: a) Explain the primary role of a board of directors and one of its responsibilities. b) Explain why LFC would want to create a board of directors. c) Recommend three individuals who should fill the Heard family's three seats, and provide support for your recommendations. You may either recommend specific individuals (of those mentioned above) or describe the type of expertise and experience that would be appropriate for the individuals filling the seats.
Transcribed Image Text:Question 1 Mark's Cattle Company (MCC) is a 20-year-old family operation, and all shares are held by Mark and Krystina Heard and their five children. Mark developed a revolutionary feed system for storage and distribution of feed to the cattle through the winter months with NO spoilage and even distribution among the herd. The feed system has gained industry notice, as Mark has demonstrated its functionalities to other cattle farmers. MCC has received an offer from Limenez Farm Corp. (LFC), a public company. LFC has offered to purchase a 40% interest in MCC for $5,000,000. As part of the offer, LFC has requested that MCC create a board of directors with a maximum of five seats, two of which will be held by individuals nominated by LFC. Mark is unsure why a board of directors would be useful and who the Heard family would want in its three seats. Required: a) Explain the primary role of a board of directors and one of its responsibilities. b) Explain why LFC would want to create a board of directors. c) Recommend three individuals who should fill the Heard family's three seats, and provide support for your recommendations. You may either recommend specific individuals (of those mentioned above) or describe the type of expertise and experience that would be appropriate for the individuals filling the seats.
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