What general duty does a board of directors owe to a corporation?

The correct answer highlights a fundamental principle of corporate governance: the duty of the board of directors to act in good faith and with care. This duty encompasses a range of responsibilities, including making informed decisions, acting in the best interests of the corporation and its shareholders, and exercising due diligence in overseeing the management of the company.

By acting in good faith, the board demonstrates integrity and fair dealing, which are essential for maintaining trust and credibility both within the corporation and among external stakeholders. The duty of care requires directors to take the time to understand the company's business, engage in appropriate due diligence, and make decisions based on accurate information. Protecting the corporation from risks and ensuring its sustainability depends on these principles being upheld by the board.

In contrast, while maximizing profits and reducing operational costs may be important goals for a corporation, they do not encompass the broader, more ethical obligation that directors have towards their organization. Avoiding conflicts of interest is also crucial, but it is more of a specific duty under the overarching principle of acting in good faith and with care, rather than defining the general duty itself. Thus, the correct answer aligns with the comprehensive responsibilities expected from a board of directors in corporate governance.