Fiduciary Principles in Corporate Law

Evan J. Criddle, Paul B. Miller, and Robert H. Sitkoff, eds., THE OXFORD HANDBOOK OF FIDUCIARY LAW (New York: Oxford University Press, 2018)

Notre Dame Legal Studies Paper No. 1933

35 Pages Posted: 18 Apr 2019

Date Written: April 18, 2019

Abstract

This chapter examines fiduciary duty in corporate law. Fiduciary duty is pervasive as well as all encompassing in corporate law. One common misconception about fiduciary duty in corporate law is that it is merely aspirational. Fiduciary duties are not simply moral requirements, they are legal ones. They are not merely suggestions, they represent the demands of the law. Corporate law has often compromised rather than insisting upon strict enforcement of fiduciary law principles. It compromises due to practical considerations that are entirely consistent with the goals of fiduciary law. In corporate law, general fiduciary law principles are balanced with practical considerations concerning the profit motive in order to achieve the best overall result for the shareholders. Understanding this tension between ambition and practicality is key to understanding fiduciary duty in corporate law. This chapter first considers the triggers for fiduciary duty in corporate law before discussing the role that the duty of loyalty plays in corporate law. It then explores the duty of care in corporate law, along with other fiduciary duties such as good faith, takeover situations and contests for control, shareholder voting rights, and the duty to monitor and the duty to disclose. The chapter proceeds by analyzing mandatory and default rules regarding the extent to which fiduciary duties can be waived in corporate law and concludes with an overview of remedies for breach of fiduciary duty.

Keywords: fiduciary duty, corporate law, fiduciary law, duty of loyalty, duty of care, good faith, shareholder voting rights, duty to monitor, duty to disclose, breach of fiduciary duty

JEL Classification: K20, K22

Suggested Citation

Velasco, Julian, Fiduciary Principles in Corporate Law (April 18, 2019). Evan J. Criddle, Paul B. Miller, and Robert H. Sitkoff, eds., THE OXFORD HANDBOOK OF FIDUCIARY LAW (New York: Oxford University Press, 2018), Notre Dame Legal Studies Paper No. 1933, Available at SSRN: https://ssrn.com/abstract=3374505

Julian Velasco (Contact Author)

Notre Dame Law School ( email )

2142 Eck Hall of Law
P.O. Box 780
Notre Dame, IN 46556-0780
United States
574-631-4965 (Phone)

HOME PAGE: http://law.nd.edu/directory/julian-velasco/

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