Stakeholder Impartiality: A New Classic Approach for the Objectives of the Corporation

38 Pages Posted: 27 Sep 2019 Last revised: 17 Dec 2019

See all articles by Amir N. Licht

Amir N. Licht

Interdisciplinary Center (IDC) Herzliyah - Radzyner School of Law; European Corporate Governance Institute (ECGI)

Date Written: September 13, 2019


The stockholder/stakeholder dilemma has occupied corporate leaders and corporate lawyers for over a century. In addition to the question whose interests should managers prioritize, the question how those interests could or should be balanced has proven equally difficult. To address the latter challenge, this paper advances a doctrinal innovation that is both new and time-honored - to implement a duty of impartiality with regard to directors’ discretion over stakeholder interests. A sub-component of trustees’ duty of loyalty, the duty of impartiality regulates settings in which several beneficiaries have conflicting interests without dictating substantive outcomes, especially not equal treatment. This paper proposes an analogous process-oriented impartiality duty to consider the interests of relevant stakeholders. Stakeholder impartiality is a lean duty whose main advantage lies in its being workable. It can be implemented in legal systems that have different positions on the objectives of the corporation, from Canada’s and India's open-ended stakeholderist approaches to Delaware’s staunch shareholderism.

Keywords: corporate governance, fiduciary duties, stakeholders, loyalty, impartiality

JEL Classification: K22

Suggested Citation

Licht, Amir N., Stakeholder Impartiality: A New Classic Approach for the Objectives of the Corporation (September 13, 2019). European Corporate Governance Institute - Law Working Paper No. 476/2019, Available at SSRN: or

Amir N. Licht (Contact Author)

Interdisciplinary Center (IDC) Herzliyah - Radzyner School of Law ( email )

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European Corporate Governance Institute (ECGI)

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