Government Governance and the Need to Reconcile Government Regulation with Board Fiduciary Duties
Lisa M. Fairfax
George Washington University - Law School
Minnesota Law Review, Vol. 95, pp. 1692-1732, 2011
GWU Legal Studies Research Paper No. 2012-89
GWU Law School Public Law Research Paper No. 2012-89
Corporate governance scandals inevitably raise concerns about the extent to which corporate directors failed in their responsibility to monitor the corporation and its managers, especially in terms of the latter's’ misdeeds. Corporate governance reforms strive to shore up directors' roles by seeking to ensure that boards have sufficient incentives to engage in effective oversight and to hold the boards more accountable. The current financial crisis has ushered in an era of significant government reform of the financial system and involvement in corporate governance matters. Such involvement has increased board of directors' responsibilities but has not reconciled those responsibilities with board functions and fiduciary law, at least in Delaware. The lack of reconciliation not only represents a missed opportunity to reconsider boards' proper role and function within the modern public corporation, but also may undermine the effectiveness of reforms.
Number of Pages in PDF File: 42
Keywords: Government Governance, Government Regulation, Board Fiduciary Duties, Delaware Corporate Law, Corporate Law, Delaware Law, Board of Directors, Fiduciary Duties, Fiduciary Duty, Financial Crisis, Director Responsibility, Government's Role in Governance, Golden Parachute, Incentive Awards, Clawbacks
JEL Classification: K2, K20, K22, K23, L21, M14, M41, P12Accepted Paper Series
Date posted: October 12, 2012
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