Consider three scenarios I–III describing how vacancies on a board of directors may be filled. Which statement is correct about their truth?

• A. Only one statement is true
• B. Only two statements are true
• C. All statements are true
• D. All statements are false

Answer: (C)

In corporate governance, there isn’t just one rigid way to fill a vacancy on a board—the permitted method depends on the company’s bylaws and applicable law. A valid path is for the remaining directors to appoint a replacement to serve until the next shareholder meeting. Another legitimate route is for shareholders to elect or appoint a new director at a general or annual meeting. A third common option is for the replacement to serve the remainder of the term until the next scheduled election, again as allowed by the governing documents. If the three scenarios described reflect these standard, permissible methods, then each one describes a valid way to fill a vacancy. That’s why all statements about how vacancies may be filled can be true, and thus the conclusion that all statements are true is correct.