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Full-Text Articles in Law
How Corporate Political Spending Strains The Limits Of The Business Judgment Rule, David Rosenberg
How Corporate Political Spending Strains The Limits Of The Business Judgment Rule, David Rosenberg
David Rosenberg
A number of agency issues arise when a corporation chooses to exercise its freedom of speech by making donations to a super PAC or other political organization. This article draws a distinction between contributions designed to influence legislation and regulation of the corporation and political donations that corporations justify as goodwill or community outreach. Analyzing the issue with an emphasis on the duty of loyalty, the article argues that much corporate political spending cannot really be understood as a business decision that should enjoy the protection of the business judgment rule. It also reflects on the Supreme Court’s recent decision …
Delaware's "Expanding Duty Of Loyalty" And Illegal Conduct: A Step Towards Corporate Social Responsibility, David Rosenberg
Delaware's "Expanding Duty Of Loyalty" And Illegal Conduct: A Step Towards Corporate Social Responsibility, David Rosenberg
David Rosenberg
Courts and legal scholars have long agreed that approval of illegal activity constitutes a violation of a corporate director’s fiduciary duties to the shareholders. While directors’ fiduciary obligations have traditionally been divided into the duties of care, loyalty and good faith, recent decisions in the Delaware courts have narrowed them down into a fairly broadly defined single duty of loyalty. Therefore, in order for shareholders to bring a lawsuit against directors for approving illegal activity, they must claim that the directors acted disloyally, even in situations where the directors believed that their decision would benefit the corporation and the shareholders. …