The Fiduciary Enterprise of Corporate Law
23 Pages Posted: 18 May 2017 Last revised: 25 May 2017
Date Written: May 18, 2017
A long-standing hallmark of the scholarship of Lyman Johnson and David Millon -- both individually and as co-authors -- has been their consistent focus on the social embeddedness of corporate law generally, and fiduciary duties in particular. By this I refer to their recognition that corporate law and fiduciary duties are deeply rooted in a complex of frameworks and institutions -- legal, economic, institutional, professional, political, social, cultural, and moral -- all of which impact one another collectively, and affect how people concretely behave and relate to one another in the marketplace. Specifically, Johnson and Millon have long argued for a more embracing conception of corporate purpose and fiduciary loyalty that preserves some capacity for corporate decision-makers to show regard for the interests of others -- be they employees, creditors, commercial counterparties, local communities, or society in general. Recognition of the social embeddedness of corporate law and fiduciary duties likewise animates their holistic exploration of a wide range of actors -- both private and public -- who all collectively impact how these duties are understood and how fiduciaries actually behave.
This relatively embracing perspective permits us to speak coherently of a "fiduciary enterprise" that is much broader than corporate directors and officers. I use the word "enterprise" in the sense of a broad collective undertaking, including the legal, economic, institutional, professional, political, social, cultural, and moral frameworks that collectively articulate, translate, and enforce fiduciary norms and rules in various settings. In Johnson and Millon's work, this has most prominently taken the form of a comprehensive exploration of a much wider range of relevant actors, all of whom play important roles in the articulation of these duties and their translation into concrete behaviors in corporate life, and all of whom ought to be held accountable for their impacts (if only indirectly in some instances, through recognition of their impacts).
This contribution to a symposium edition of the Washington and Lee Law Review, honoring Johnson and Millon's contributions to the field of corporate law, briefly sketches the contours of this broader "fiduciary enterprise" of corporate law and governance and identifies some of the underlying lessons and challenges that this perspective reveals -- for scholars, practitioners, lawmakers, and judges alike.
Keywords: fiduciary duty, loyalty, care, equity, corporate law, corporate governance, directors, officers, Delaware Court of Chancery, contractualism
JEL Classification: G34, K22, M14
Suggested Citation: Suggested Citation