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Series

Business Organizations Law

Law and Society

2001

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Full-Text Articles in Law

Gradgrind’S Education: Using Dickens And Aristotle To Understand (And Replace?) The Business Judgment Rule, Kent Greenfield, John E. Nilsson Jan 2001

Gradgrind’S Education: Using Dickens And Aristotle To Understand (And Replace?) The Business Judgment Rule, Kent Greenfield, John E. Nilsson

Boston College Law School Faculty Papers

This article uses literature and philosophy to help explain and critique existing corporate law doctrine. Starting from Charles Dickens's Hard Times, the article provides a new explanation for one of the great puzzles of existing corporate law doctrine, the coexistence of the strict duty of management to maximize profits and the "business judgment rule," the practice of courts to review management decisions with great deference. The article argues that the business judgment rule is a necessary corrective to the irrationality of the underlying duty to maximize profits. The article makes this argument by analogizing corporate law to Dickens's ...