Essay about Vector Aeromotive Corporation Case Study

Generally, the board of directors are responsible for the following duties: 1) duty of care – duty to make/delegate decisions in an informed way; 2) duty of loyalty – duty to advance corporate over personal interests; 3) duty of good faith – duty to be faithful and devoted to the interests of the corporation and its shareholders; 4) duty not to â€Å"waste† – duty to avoid deliberate destruction of shareholder value. There is no reason to believe that the duties of Vector’s board should be any different. The major conflict between Vector’s board and its president centers on President Wiegert’s management style, belief of excessive spending and his deceitfulness towards the board members and potential investors. Although President Wiegert’s†¦show more content†¦They safeguard the equity investors’ interests and they protect the interests of other corporate stakeholders. There was a clear conflict of in terest having the president of Vector not only residing as the board chairman but also the individual responsible for selecting the board members. President Wiegart chose close business associates as the company’s board members. There were many mistakes and ignorant decisions that would ultimately plague Vector’s board. It was recognized early on, by the other board members, that the effectiveness of President Wiegart would not be sustained but they decided not to identify or train a possible replacement because Wiegart would â€Å"strongly oppose such actions†. This is a clear example of how the board members chose to ignore other poor actions made by Wiegart in the years that followed. He was even so inclined to add another board member, also another one of his long-time business associates, when he did experience a little resistance with the other board members. Possibly in hopes of shifting the power back in his favor. The board members rarely received information prior to their meetings and what information they did receive, just enough was given in order for Wiegart to achieve the conclusion that he wanted. None of the decisions the board made were in the interests of the investors rather they were made in the interest of keeping a feeling of cohesiveness within the company. The only board memberShow MoreRelatedCase Study- Vector Aeromotive Corporation1685 Words   |  7 PagesNo 3. The Extended Case Study- Vector Aeromotive Corporation Zhenhua Rui 09/20/2010 Vector Aeromotive Corporation was a company which designed, manufactured and sold exotic sports cars. Vector was the only U.S.-based manufacture of exotic sports cars, and his major competitors were Ferrari and Lamborghini. Gerry Wiegert is the President and founder of this company. In 1987, the board of directors was formed with three directors. This case shows events happening between the board and President Gerry