Corporate directors are governed by the ________. Trustees are governed by the ________.

Corporate directors are governed by the ________. Trustees are governed by the ________.
A . none of these answers
B . "common sense doctrine"; business judgment rule
C . business judgment rule; Prudent Man Rule
D . business judgment rule; "common sense doctrine"
E . "common sense doctrine"; Prudent Man Rule
F . Prudent Man Rule; business judgment rule
G . Prudent Man Rule; "common sense doctrine"

View Answer

Answer: C

Explanation:

This question is trying to highlight the different standards of business care fiduciaries must uphold in charitable organizations and trusts respectively. Thus, fiduciaries at charities are bound by the business judgment rule, since they are comparable to directors of business corporations. In contrast, trustees are governed by the Prudent Man Rule. This distinction in the standard duties applicable to fiduciaries in different situations should be recognized.