A Comparative Perspective on the Limitations of the Duty of Oversight – A Comment on Lisa Fairfax

Abstract:     
Professor Fairfax shows that the duty to monitor promises more than it can actually deliver and offers false hope that enhancing directors' oversight responsibilities can improve corporate governance. The nearly insurmountable standard for liability in oversight cases and its effect on signalling the expected standard of conduct could have long-term implications for corporate law in the United States. This comment contrasts the standard for liability in oversight cases in the United States with the liability standards in other countries. After outlining why stable rules may not suffice to make directors’ oversight role more robust, the author provides some initial thoughts on how contractual and quasi law forms of dynamic governance could help improve the duty of oversight.

Number of Pages in PDF File: 11

Keywords: corporate law, corporate governance, board of directors, duty to monitor, comparative corporate law

Accepted Paper Series