Imagining the Intangible

Abstract

Existing paradigms in corporate law do not adequately conceptualize today's corporations. Corporate assets have become increasingly intangible, and operational structures have been materially altered in the last two decades by information technology. This article argues in favor of "asset sensitive" governance. Asset sensitivity embodies three important additions to prior corporate law scholarship. First, using developmental psychology theory as its starting point, asset sensitive governance focuses on corporate development using a corporation in a social context as the smallest unit of analysis. Second, because corporations rely on intangible assets that are fragile and relational, asset sensitivity mandates shifting fiduciary duties of good faith and care toward developing and preserving corporate assets: ongoing officer and director oversight is needed, not simply oversight of extraordinary transactions. Third, asset sensitive governance considers change across time—in stakeholders, in the economic environment, and in corporate learning.

Keywords: fiduciary duties, corporate law, governance, intangible assets, technology, intellectual property, trade secrets

JEL Classification: K22