A corporation director has a duty of loyalty to avoid conflicts of interest and act in the company's best interests, and a duty of care to make informed decisions with reasonable care. Public companies were previously barred from making personal loans to directors to prevent conflicts of interest, but it could be argued that such loans should not always be prohibited if properly disclosed and approved.

1. Please answer the following:
1. Please define how a corporation director would have a duty of loyalty and a duty of care. You
can use an example, real or made up, if you wish.
2. Public companies cannot make personal loans to directors or officers under Sarbanes-Oxley.
Why was that problematic? Can you make an argument that such a practice should not be barred?