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Are Corporate Officers Advised About Fiduciary Duties?

25 Pages Posted: 19 Jun 2009  

Lyman Johnson

Washington and Lee University - School of Law; University of St. Thomas, St. Paul/Minneapolis, MN - School of Law

Dennis Garvis

Washington and Lee University - Williams School of Commerce, Economics, and Politics

Abstract

This Article reports the results of an empirical study of whether and how in-house corporate counsel advise corporate officers about fiduciary duties. The fiduciary duties of officers long have been neglected by courts, scholars, and lawyers, as the Introduction explains, even though executives play a central role in corporate success and failure. The study’s findings, organized by type of company (public or private), size, and attorney position within the firm, show several interesting patterns in advice-giving practices. For example, fewer than half of all respondents provided advice to officers below the senior-most rank. The results raise the possibility that, unlike directors who may overestimate their liability exposure, certain shortcomings in giving advice to officers may cause them to underestimate personal liability exposure and engage in more risky behavior than is desirable for the company itself. The Article also offers recommendations for improved practices in advising officers about their duties.

Keywords: corporate counsel, fiduciary duties, personal liability, advising officers

Suggested Citation

Johnson, Lyman and Garvis, Dennis, Are Corporate Officers Advised About Fiduciary Duties?. The Business Lawyer, Vol. 64, August 2009; Washington & Lee Legal Studies Paper No. 2009-06; U of St. Thomas Legal Studies Research Paper No. 09-18. Available at SSRN: https://ssrn.com/abstract=1421410

Lyman P. Q. Johnson (Contact Author)

Washington and Lee University - School of Law ( email )

Lexington, VA 24450
United States
540-458-8515 (Phone)
540-458-8488 (Fax)

University of St. Thomas, St. Paul/Minneapolis, MN - School of Law

MSL 400, 1000 La Salle Avenue
Minneapolis, MN Minnesota 55403-2005
United States

Dennis Garvis

Washington and Lee University - Williams School of Commerce, Economics, and Politics ( email )

Lexington, VA 24450
United States
540-458-8069 (Phone)
540-458-8639 (Fax)

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