Corporate Governance: Sliding Seamlessly into the Twenty-First Century
Journal of Corporation Law, Vol. 21, p. 417, 1996
39 Pages Posted: 2 Mar 2013
Date Written: January 1, 1996
Corporate governance is an often discussed, but little understood, topic that generally generates more heat than light. Beginning with an analytical overview of how business law prognosticators have evaluated the theoretical premises for corporate governance through the years, this article examines the competing forces that currently pull and push governance into the twenty-first century. It reviews how the significant surrounding legal contexts – management’s general fiduciary obligations, takeovers and related restructurings, and securities regulation – have dramatically reformed the climate in which corporations operate, yet have overall remained strangely static. Ultimately, this article ties together many disparate corporate governance themes to reach a surprising conclusion: that corporate governance today is in a relatively stable and healthy condition despite extreme influences; that the corporate governance debate has reached a higher plane of cooperative discussion, enabling business law commentators, practitioners, and business people to examine and resolve the underlying issues in a manner beneficial to all concerned; and that the governance of America’s businesses will slide seamlessly into the twenty-first century, retaining a reasoned balance of corporate wealth and accountability. No single monitor will be responsible for the vitality of good governance; indeed, the multiple forces represented by active, informed shareholders and responsible, responsive management working together will provide the required checks and balances. Most miraculously, even as mistakes are made in the affecting legal fields, corporate governance has shown an uncanny, cat-like ability to land on its feet and maintain an equilibrium that benefits corporations, shareholders, and society.
Keywords: Corporate governance, fiduciary, duty of care, duty of loyalty, shareholder, derivative dilemma, securities litigation
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