Tip 1: Take Your Time
When considering an ethical issue, take care in evaluating various options. “Ethical leaders don’t let urgency get in the way of making an ethical decision,” says Dr. David Meinert, dean of the College of Business at Missouri State University. Use your time to get the facts, to understand the issues and the stakeholders, and to determine the severity of those impacts.
This is precisely the method of Randell Wallace, corporate lawyer and partner in the Springfield office of Kutak Rock. When one of his clients is trying to make a decision, like in the case of a merger or acquisition, he reminds them of their duty of care. “Care basically means that as a director, you have to spend a reasonable amount of time and effort in studying the proposals, getting advice from your professional advisors and hopefully making the correct decision that is in the best decision of the shareholders,” Wallace says.
Tip 2: Remember Your Loyalty
“If there is a [situation] in which a director becomes aware of a business opportunity that the corporation could fulfill and could take on in a profitable manner, the director has an obligation to bring that to the corporation first and not pursue it on his own,” Wallace says. According to Cornell Law School, this is known as the corporate business opportunity.