Executive Private Misconduct
88 George Washington Law Review 327 (2020)
65 Pages Posted: 30 Jun 2020
Date Written: June 11, 2020
Executives misbehave. In recent years, the world has been outraged and appalled by the shocking misbehavior of corporate executives. Some of their behavior have been plainly unethical; others have been deeply offensive; and still others have been simply criminal. Regardless of the misbehavior, such executive private misconduct—when made public—has frequently damaged their public reputations, harmed their company’s market values, destroyed investor portfolios, and raised serious legal and policy issues.
This Article provides one of the first comprehensive examinations of executive private misconduct and its wide-ranging effects on law, business, and society. It begins by providing context for how we got here. It investigates how the unfolding #MeToo movement, shifting social understandings of public and private, and changing corporate social expectations have all fostered a new landscape that is less tolerant of executive private misconduct. Next, it examines why legal gaps and tensions in current business law complicate executive private behavior discussions. It reveals how corporate law principles of fiduciary duties and securities law principles of disclosures were not structurally designed to confront the hard issues and questions raised by executive private misconduct. Moving from causes to consequences, this Article next examines the larger implications of executive private misconduct on corporate governance, corporate policies, and corporate purpose. Finally, this Article recommends pragmatic next steps for corporate stakeholders, regulators, and policymakers in a changing business environment. Specifically, it proposes a new baseline framework for working through perplexing executive private misconduct issues, along with concrete business policy reforms concerning nondisclosure agreements, mandatory arbitration, and annual misconduct reports. Ultimately, this Article seeks to provide an original, workable roadmap and compass for conceptualizing, navigating, and addressing executive private misconduct and its impact on law, business, and society.
Keywords: corporate governance, compliance, MeToo, securities disclosure, publicness, privacy, corporate stakeholders, corporate purpose, corporate social responsibility, corporate social activism
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