Toward a public enforcement model for directors' duty of oversight

Renee Jones, Michelle Anne Welsh

Research output: Contribution to journalArticleResearchpeer-review

Abstract

This Article proposes a public enforcement model for the fiduciary duties of corporate directors. Under the dominant model of corporate governance, the principal function of the board of directors is to oversee the conduct of senior corporate officials. When directors fail to provide proper oversight, the consequences can be severe for shareholders, creditors, employees, and society at large. Despite general agreement on the importance of director oversight, courts have yet to develop a coherent doctrine governing director liability for the breach of oversight duties. In Delaware, the dominant state for U.S. corporate law, the courts tout the importance of board oversight in dicta, yet emphasize in holdings that directors cannot be personally liable for oversight failures, absent evidence that they intentionally violated their duties.
Original languageEnglish
Pages (from-to)343 - 403
Number of pages61
JournalVanderbilt Journal of Transnational Law
Volume45
Issue number2
Publication statusPublished - 2012

Cite this