The principle that if persons running a corporation make honest, careful decisions within their corporate powers, no court will interfere with these decisions even if the results are bad.

An agreement among partners or owners of a company that if one dies or withdraws from the business, his or her share will be bought by the others or disposed of according to a prearranged plan.

A program established by corporate management to prevent and detect misconduct among officers, directors, and employees of the corporation, and to ensure that corporate activities are conducted legally and ethically.

The type of voting in which each person (or each share of stock, in the case of a corporation) has as many votes as there are positions to be filled. Votes can be either concentrated on one or on a few candidates or spread around.

A lawsuit by a stockholder of a corporation against another person (usually an officer of the company) to enforce claims the stockholder thinks the corporation has against that person.

A lawsuit by a stockholder to enforce his or her own rights against a corporation or its officers rather than to enforce the corporation’s rights in a derivative action.

1. A person who manages money or property for another person and in whom that other person has a right to place great trust. 2. A relationship like that in definition no. 1. 3. Any relationship between persons in which one person acts for another in a position of trust; for example, lawyer and client or parent and child.

Impartial individuals who are often appointed to oversee the election of directors at the shareholder meetings of large corporations.

The right of some stockholders to have the first opportunity to buy any new stock the company issues.

A person who acts for another person (usually to vote in place of the other person in a meeting the other cannot attend). A document giving that right.

The document sent or given to stockholders when their voting proxies are requested for a corporate decision. The SEC has rules for when the statements must be given out and what must be in them.

Extra money given to punish the defendant and to help keep a particular bad act from happening again.

The number of persons who must be present to make the votes and other actions of a group (such as a board) valid. This number is often a majority (over half) of the whole group, but is sometimes much less or much more.

A lawsuit brought by one stockholder in a corporation to claim rights or to fix wrongs done to many or all stockholders in the company.