What happens if a director learns of misdeeds after the fact?

The correct response is that directors should take immediate steps to absolve themselves upon learning of misdeeds that occurred under their directorship. In a corporate governance context, directors have fiduciary duties that include acting in the best interests of the company, which encompasses a responsibility to address wrongdoing once they become aware of it.

When directors learn of previous misdeeds, their ethical and legal obligations require them to investigate the matter. This response is crucial not only to mitigate potential damages to the company and its stakeholders but also to protect their own interests, as failing to act could expose them to liability for breach of duty. This could involve informing the board, conducting an internal investigation, or, in some cases, reporting the misdeeds to relevant authorities if the issues warrant such action.

In contrast, the other options do not adequately reflect a director's responsibilities. Directors cannot simply do nothing, ignore past issues, or claim absolution based on their lack of prior knowledge. The role of a director comes with the expectation of vigilance and accountability, regardless of whether the misconduct took place before they assumed their position.