Question

A detailed set of rules adopted by the board of directors after a corporation is incorporated that contains provisions for managing the business and the affairs of the corporation are referred to as ________?

1) ultra vires rules
2) articles of incorporation
3) bylaws
4) corporation codes

Answer 1

The detailed rules adopted by the board of directors for managing a corporation's affairs are referred to as bylaws. They are fundamental to corporate governance and ensure the company operates transparently and accountably, as underscored by the failure of Lehman Brothers.

Step-by-step explanation:

A detailed set of rules adopted by the board of directors after a corporation is incorporated that contains provisions for managing the business and the affairs of the corporation are referred to as bylaws. These are rules that are established by the corporation to regulate its own operations and outline the responsibilities of directors and officers, meeting protocols, and other corporate governance matters. Bylaws are separate from the articles of incorporation, which legally establish the corporation, and are generally more detailed in how they govern the internal functioning of the corporation. They play a critical role in corporate governance, along with the board of directors, auditing firms, and outside investors, to ensure transparency and accountability within the corporation. For instance, after the Lehman Brothers failure, it was evident that effective corporate governance is crucial for providing accurate financial information to investors.