Shifting Contours of Directors’ Fiduciary Duties and Norms in Comparative Corporate Governance
University of California Irvine (UCI) Journal of International, Transnational, and Comparative Law, Forthcoming
European Corporate Governance Institute - Law Working Paper No. 489/2020
Monash University Faculty of Law Legal Studies Research Paper No. 3521111
32 Pages Posted: 21 Jan 2020 Last revised: 29 Jan 2023
Date Written: January 17, 2020
Corporate law and corporate governance are often called upon to address problems in international and transnational contexts. Financial markets are global and the problems in those markets are often similar, if not identical, even though the capital market structure across jurisdictions differs significantly. The beginning of the 21st century was marked by a spate of international corporate scandals, and the 2007-2009 global financial crisis reflected the global “interconnectedness” of contemporary international capital markets.
These events highlighted the issue of accountability for wrongful conduct by company directors and officers. Modern corporate governance is highly fragmented, encompassing an array of techniques to control the improper exercise of discretion and conflicts of interest. According to Professor Gilson, it is “a braided framework” that encompasses, not only autonomous legal rules, but also non-binding norms.
This Article analyzes, from a comparative perspective, two core aspects of this “braided framework”. First, the Article considers fiduciary duties. It argues that, although there are broad similarities in the scope and operation of fiduciary duties in common law jurisdictions, such as the United States, United Kingdom and Australia, at a more granular level, there are important differences, which may affect the accountability of directors and officers.
Secondly, the Article examines corporate codes. Although generally non-binding, corporate codes can create powerful norms concerning the role of directors and officers and the exercise of their powers. These codes may also interact with fiduciary duties in complex and interesting ways, either complementing, or creating tensions with, those duties. Yet, such codes are by no means homogeneous, and substantive differences can often be traced to the identity of the actors responsible for writing them.
Keywords: director and officer fiduciary duties, comparative law, Delaware corporate law, UK company law, Australian company law, duty of care, corporate governance codes, stewardship codes, norms, shareholders, stakeholders
JEL Classification: G30, G34, G38, K10, K19, K22, N4, N20, M14
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