A basic tenet of corporate law is that the Board of Directors assumes responsibility for managing the business and affairs of the corporation. Boards of Directors establish policies for corporate management and make decisions on major company issues. Further, courts have determined that when directors are acting on behalf of the corporation, they owe the company and its shareholders the fiduciary duties of care and loyalty. If, in the face of a corporate transaction, the majority of directors cannot act solely in the best interest of the company and are instead faced with a conflict of interest, the best course of action may be to establish a special negotiating committee.
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