A CEO's failure to uphold the responsibilities of his office can result in personal liability for the company's debt and legal actions from shareholders.
Tony, are you listening? We are taking good notes.
"Under the business judgment rule, it is the responsibility of shareholders to demonstrate a CEO's failure to uphold his fiduciary responsibilities."-- Matt Petryni, of Demand Media
So if that's the case, can shareholders ask to audit the CEO's business activities as a means to gain such evidence? If not, how are shareholders supposed to "demonstrate" a CEO's fiduciary failure?
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