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Directors' Duties

Definition:

In the context of corporate governance, Directors' Duties refers to stated responsibilities of the company's Board of Directors. These provisions allow directors to consider constituencies other than shareholders when considering a merger. These constituencies may include, for example, employees, host communities, or suppliers. This provision provides boards of directors with legal basis for rejecting a takeover that would have been beneficial to shareholders. A majority of states have Directors Duties Laws.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

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Stock buyback

A corporation's purchase of its own outstanding stock, usually in order to raise the company's earnings per share.

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