Correct Option: C. No staff member could borrow more than N250,000 Detailed Explanation: In the context of the Lekki Headmaster, the board made a decision regarding the loan limits for staff members, which is a crucial aspect of financial management within the institution. The correct answer is that no staff member could borrow more than N250,000.

1. Understanding Loan Limits: Loan limits are set to ensure that the financial health of the institution is maintained while also providing support to staff members. By capping the amount that can be borrowed, the board aims to mitigate risks associated with lending, such as default on loans, which could affect the institution's finances.
2. Rationale Behind the N250,000 Limit:
3. Financial Prudence: Setting a limit of N250,000 reflects a cautious approach to lending. It allows staff members to access funds for personal or professional needs without overextending the institution's financial resources.
4. Equity Among Staff: This limit ensures that all staff members have equal access to loans, preventing any potential favoritism or unequal treatment in financial matters.
5. Encouraging Responsibility: By limiting the amount that can be borrowed, the board encourages staff to be responsible with their finances, ensuring that they do not take on more debt than they can manage.
6. Implications of the Decision:
7. Budgeting: Staff members will need to plan their finances carefully, knowing that they cannot rely on large loans. This can lead to better financial habits.
8. Institutional Stability: By controlling the amount of money that can be lent, the institution can maintain a stable financial environment, which is crucial for its long-term sustainability.

Why Other Options Are Incorrect:

• Option A: No loans would be given to staff members: This option is incorrect because it suggests a complete prohibition on loans, which would not support staff needs. The board's decision was to allow loans but with a limit, not to eliminate them entirely.
• Option B: No staff member could borrow more than N500,000: This option is incorrect because it proposes a higher limit than what was decided. Allowing loans up to N500,000 could lead to financial strain on the institution and increase the risk of defaults.
• Option D: Loan limits would be decided by the principal: This option is incorrect because it implies that the principal has unilateral authority to set loan limits. The decision was made by the board, indicating a collective approach to governance rather than leaving it to a single individual.

Summary of Key Points:

• The board decided that no staff member could borrow more than N250,000 to ensure financial prudence and equity.
• This limit encourages responsible borrowing and helps maintain the institution's financial stability.
• Other options either suggest no loans or higher limits, which do not align with the board's decision.
• Understanding the rationale behind loan limits is essential for effective financial management in educational institutions.