Care and Diligence and Audit Committee Members

"The duty of due diligence and due care has been defined, generally, as a requirement that each director and officers exercise the care which ordinarily prudent and reasonable persons would exercise under the same circumstances (Duty of Diligence and Due Care)."

The concept of due care and diligence is intended to hold those with a fiduciary responsibility to a standard of care that makes them responsible for knowing what a prudent person might have known. It remains the standard for determining legal duty.

In the financial and legal community, due care and diligence is expected when audit committee members exercise their responsibilities. Audit committees first came into being when the SEC recommended that publicly held companies establish them in 1972. Audit committee roles and responsibilities have since evolved over time. That evolution included the establishment in 1987 of six specific audit committee recommendations...
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