Are Corporate Officers Advised About Fiduciary Duties?
Washington and Lee University - School of Law; University of St. Thomas, St. Paul/Minneapolis, MN - School of Law
Washington and Lee University - Williams School of Commerce, Economics, and Politics
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
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.
Number of Pages in PDF File: 25
Keywords: corporate counsel, fiduciary duties, personal liability, advising officers
Date posted: June 19, 2009