Final answer:
The duty that mandates board members to resolve conflicts of interest in favor of the corporation is the duty of loyalty, requiring prioritization of the corporation's interests above personal ones. Option D is correct.
Step-by-step explanation:
The duty that suggests conflicts of interest should always be resolved in favor of the corporation is the duty of loyalty. This duty requires board members to act in the best interest of the corporation and avoid personal conflicts of interest. The duty of loyalty mandates that board members must prioritize the corporation’s interests above their own personal or outside interests.
It's important to distinguish this duty from the other options given. The duty of care requires board members to make decisions with a reasonable degree of diligence and intelligence. The duty of good faith expects board members to act with honesty and faithfulness to the corporation. Whereas the duty of candor involves being open and honest in communications regarding the corporation.
The duty of loyalty among board members suggests that conflicts of interest are always to be resolved in favor of the corporation. This means that board members must prioritize the interests of the corporation and act in its best interest, even if it conflicts with their personal interests or relationships.
For example, if a board member has a financial interest in a decision that could benefit them personally but harm the corporation, they must recuse themselves from the decision-making process to avoid any conflicts of interest. Resolving conflicts of interest in favor of the corporation helps ensure ethical decision-making and protects the interests of shareholders and stakeholders.