Reality Check on Officer Liability

24 Pages Posted: 12 Aug 2011 Last revised: 19 Jan 2012

Lyman Johnson

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

Rob Ricca

Glu Mobile Inc.

Date Written: 2011

Abstract

This article addresses the fiduciary duties of corporate officers. Responding to a critique that recent scholarly analyses of officers depart from reality, it argues that, on a variety of grounds, those analyses are more realistic than the critique and provide doctrinal coherence and advance the goal of meaningful executive accountability. The divergent governance functions of directing versus managing are described and it is argued that those disparate roles should matter for fiduciary duty analysis. No great outbreak of litigation should be expected if officers are held to a stricter duty of care than directors because boards of directors, not courts, likely will resolve the vast majority of disputes concerning officer breaches of duty. The ex-ante and ex post roles of fiduciary duties are emphasized, and the need for the Delaware legal community to more fully address officer duties is emphasized, lest the federal government emerge as the chief regulator of senior management, a role central to corporate governance.

Keywords: corporate officers, corporate officer liability, fiduciary duty, corporate governance

Suggested Citation

Johnson, Lyman and Ricca, Rob, Reality Check on Officer Liability (2011). Business Lawyer, Vol. 67, November 2011; U of St. Thomas Legal Studies Research Paper No. 11-22; Washington & Lee Legal Studies Paper . Available at SSRN: https://ssrn.com/abstract=1908477 or http://dx.doi.org/10.2139/ssrn.1908477

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

Rob Ricca

Glu Mobile Inc. ( email )

500 Howard St. Suite 300
San Francisco, CA 94105
United States

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