A More Realistic Approach to Directors' Duties

Transactions: Tennessee Journal of Business Law, v. 15, 2013, p. 15-31

U of Maryland Legal Studies Research Paper No. 2013-52

18 Pages Posted: 6 Sep 2013 Last revised: 26 Feb 2014

See all articles by Michelle M. Harner

Michelle M. Harner

University of Maryland Francis King Carey School of Law

Date Written: 2013

Abstract

Expectations for what fiduciary duties can achieve in the corporate context are unrealistic. This segment of the law — and the alleged deficiencies therein — are blamed for corporate scandals, securities fraud, failed business plans, and even a company's insolvency. Risk is, however, inherent in business, and human beings are flawed. Fiduciary duty law cannot change these basic facts. To the extent we think it can, we will continue to be disappointed and frustrated. This essay considers recasting (and to a greater extent codifying) directors’ duties in a positive frame to help foster better director oversight. It does not suggest that codifying greater clarity into directors’ duties would result in more or less director liability; rather, the primary objective would be to improve director performance outside of the litigation sphere.

Keywords: fiduciary duties, risk, oversight, director performance

Suggested Citation

Harner, Michelle M., A More Realistic Approach to Directors' Duties (2013). Transactions: Tennessee Journal of Business Law, v. 15, 2013, p. 15-31; U of Maryland Legal Studies Research Paper No. 2013-52. Available at SSRN: https://ssrn.com/abstract=2320747

Michelle M. Harner (Contact Author)

University of Maryland Francis King Carey School of Law ( email )

500 West Baltimore Street
Baltimore, MD 21201-1786
United States
410-706-4238 (Phone)

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