Corporate Founders’ Inventions and Duty of Loyalty to the Corporation
Posted: 10 Jan 2019
Date Written: December 12, 2018
Many of us have been intrigued by the extraordinary success achieved by corporate founders and innovators such as Steve Jobs, Jeff Bezos, Bill Gates or Mark Zuckerberg at the apex of their entrepreneurial careers. Nowadays, we often identify them with the corporations they founded. Together with those world-famous corporate founders, many other inventors/entrepreneurs have contributed to the development of today's globalized society. But how is the (often difficult) path to success of corporate founders connected to the organizations they have worked for and they have founded? How do corporate law rules and especially the duty of loyalty promote and/or hinder their innovative skills? How do their innovative zest survive intra-corporate conflicts - which in the early personal stories of corporate founders often determines break-ups and consequent inter-corporate mobility? This paper argues that that the possibility to waive the duty of loyalty - in turn assisted by effective remedies for its breach - may be the key for striking the best equilibrium between efficient start-up financing and efficient innovation by corporate founders.
Keywords: Directors’ Duty of Loyalty; Corporate Founders; Technological Innovation; Disruptive Innovation; Contracting for Innovation; Corporate Governance; Corporate Opportunities; Directors’ Duty not to Compete
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