Harry, Bill and Martha are the executive directors ofXilang Pty Ltd. Harry runs day to day business of thecompany and Bill is in charge of the company marketingactivities. Martha relies on her husband, Harry, to give herinformation. She rarely attends directors' meeting anddoes not bother to read weekly reports about thecompany financial position. What directors' duty hasMartha breached in this situation?Select one:a. Duty of care and diligence.b. Duty to avoid improper use of information.c. Duty to prevent insolvent trading.d. Duty to disclose material personal benefit.

Answered: Harry, Bill and Martha are the…

Principles Of Marketing

17th Edition

ISBN:9780134492513

Author:Kotler, Philip, Armstrong, Gary (gary M.)

Publisher:Kotler, Philip, Armstrong, Gary (gary M.)

Chapter1: Marketing: Creating Customer Value And Engagement

Section: Chapter Questions

Problem 1.1DQ

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Harry, Bill and Martha are the executive directors of
Xilang Pty Ltd. Harry runs day to day business of the
company and Bill is in charge of the company marketing
activities. Martha relies on her husband, Harry, to give her
information. She rarely attends directors' meeting and
does not bother to read weekly reports about the
company financial position. What directors' duty has
Martha breached in this situation?
Select one:
a. Duty of care and diligence.
b. Duty to avoid improper use of information.
c. Duty to prevent insolvent trading.
d. Duty to disclose material personal benefit.

Expert Solution

Step 1

Executive director in a company has an important role to play since they are the agents of the shareholders according to the agency theory. They are vested with organizational responsibilities of acting with due care and diligence in making decisions related to organization. They have to attend board meetings and keep a check on financial activities and statements of the company since they are responsible and accountable to the shareholders.

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