Abstract

http://ssrn.com/abstract=1414962
 
 

Citations (2)



 
 

Footnotes (417)



 


 



Director Compliance with Elusive Fiduciary Duties in a Climate of Corporate Governance Reform


Nadelle Grossman


Marquette University - Law School

June 5, 2009

Fordham Journal of Corporate and Financial Law, Vol. 12, p. 393, 2007
Marquette Law School Legal Studies Paper No. 09-24

Abstract:     
Corporate governance has become a hot topic following accounting scandals at Enron, WorldCom and others, which led to colossal corporate collapses. In many of those cases, the boards were 'asleep at the wheel,' failing to catch managements’ questionable accounting practices. The Sarbanes-Oxley Act of 2002 was the federal government’s attempt at fixing the holes in the corporate governance system exposed by the accounting scandals. Through a patchwork of disclosure requirements and conduct rules, Congress and the Securities and Exchange Commission have attempted to bring about an increase in board oversight of, and independence from, management. The stock exchanges have also jumped into the corporate governance arena, implementing new rules with similar objectives. This collective corporate governance reform has imposed a significant new layer of responsibilities and qualifications on directors of public companies. Yet shareholders’ only avenue to enforce the new duties under these reforms is through state law fiduciary duties. My article demonstrates how state courts have started to enforce the governance mandates under the reforms through fiduciary duties. Specifically, in my article I examine the watershed Disney case and the duty to act in good faith, and identify how Delaware courts are poised to use this duty to enforce directors’ oversight responsibilities under the corporate governance reforms. My article takes a uniquely holistic view of these shifts in Delaware jurisprudence, explaining how they allow Delaware courts to more closely align the standard of conduct expected from directors with the standard of review that courts apply in determining liability. My article ultimately submits that by more closely aligning these two standards through the duty to act in good faith, the Delaware courts are able to reflect evolving shareholder expectations in fiduciary duty law, thereby making directors more responsive to the shareholders who elected them.

Number of Pages in PDF File: 75

Keywords: fiduciary, corporate governance, accounting, Sarbanes-Oxley

JEL Classification: K2, K22

Accepted Paper Series





Download This Paper

Date posted: June 5, 2009  

Suggested Citation

Grossman, Nadelle, Director Compliance with Elusive Fiduciary Duties in a Climate of Corporate Governance Reform (June 5, 2009). Fordham Journal of Corporate and Financial Law, Vol. 12, p. 393, 2007; Marquette Law School Legal Studies Paper No. 09-24. Available at SSRN: http://ssrn.com/abstract=1414962

Contact Information

Nadelle Grossman (Contact Author)
Marquette University - Law School ( email )
Eckstein Hall
P.O. Box 1881
Milwaukee, WI 53201
United States
Feedback to SSRN


Paper statistics
Abstract Views: 908
Downloads: 144
Download Rank: 122,147
Citations:  2
Footnotes:  417
Paper comments
No comments have been made on this paper

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo2 in 0.281 seconds