56 Pages Posted: 12 Aug 2016
Date Written: August 10, 2016
The officer is at the center of modern corporate governance. Wielding immense power and influence, officers’ conduct and decision-making can determine the success or failure of their companies and impact the economy more broadly. Fiduciary duties under state law serve as a vital check on officer power. This article is the third piece in a study of the role of fiduciary duties in regulating officer behavior. It examines an underlying premise in prior scholarship – that officers are rarely being held accountable for their conduct in the traditional fiduciary duty litigation context of state court. This article reviews opinions of the Delaware state courts between 2004 and 2014 to gain insight into officers’ fiduciary accountability in this context. The results of this research suggest a modest occurrence of officer accountability in state court, consistent with prior scholars’ views. The court opinions also support other beliefs surrounding officer misconduct and the enforcement process for officers’ fiduciary duties. This article concludes with a discussion of long-term considerations for future research regarding the role of litigation in shaping officer accountability and fiduciary duty doctrine.
Keywords: Officer, Corporate Governance, Accountability, Derivative Litigation, Fiduciary Duty, Corporation, Delaware
JEL Classification: K22, K41
Suggested Citation: Suggested Citation