Answer: display loyalty to the company.

## Explanation **Correct Answer: B - display loyalty to the company.** **Analysis:** 1. **Board of Directors' Fiduciary Duties:** Members of a company's board of directors have fiduciary duties to the company and its shareholders. These duties primarily include: - **Duty of Loyalty:** Requires directors to act in the best interests of the company and its shareholders, avoiding conflicts of interest and self-dealing. - **Duty of Care:** Requires directors to make informed decisions with the diligence that a reasonably prudent person would exercise. 2. **Why Option B is Correct:** - The duty of loyalty is a fundamental requirement for board members. They must prioritize the company's interests over their own personal interests. - This duty includes avoiding conflicts of interest, not taking corporate opportunities for personal gain, and maintaining confidentiality of company information. 3. **Why Option A is Incorrect:** - Board members do not report to the CEO; in fact, the opposite is true. The board of directors oversees and evaluates the CEO's performance. - The board hires, fires, and sets compensation for the CEO, establishing a supervisory relationship rather than a reporting one. 4. **Why Option C is Incorrect:** - Board members are not required to work for the company or its industry. Many boards include independent directors who bring diverse expertise from different industries. - In fact, corporate governance best practices often recommend having independent directors who are not employed by the company to provide objective oversight. **Key Takeaway:** The primary legal and ethical requirement for board members is to fulfill their fiduciary duties, with the duty of loyalty being particularly crucial in ensuring they act in the company's best interests rather than their own.

Author: LeetQuiz .