After Enron declared bankruptcy, there was an attempt by some shareholders to hold the members of the board of directors personally responsible for the disaster. Which of the following would provide the basis for a legal claim against the directors?

Question

a. The directors failed to consider the needs of the various stakeholder groups at Enron.
b. The directors believed the lies told to them by dishonest Enron managers.
c. The directors were fully independent of Enron.
d. The directors were business associates of the Enron CEO and other managers.
e. The directors did not exercise their best business judgment.

Answer 1

The most suitable option that would provide the basis for a legal claim against the directors of Enron is:

e. The directors did not exercise their best business judgment.

This option implies a failure of the directors to fulfill their fiduciary duty to act in the best interests of the shareholders. Directors have a responsibility to make informed and reasonable decisions in their oversight of the company's management and operations. If they failed to do so, it could be argued that they are liable for any resulting damages to the shareholders.

While the other options may suggest areas of concern regarding the behavior of the directors, they do not directly indicate a breach of fiduciary duties as strongly as option (e).