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Full-Text Articles in Law
Spare The Rod, Spoil The Director? Revitalizing Directors' Fiduciary Duty Through Legal Liability, Lisa M. Fairfax
Spare The Rod, Spoil The Director? Revitalizing Directors' Fiduciary Duty Through Legal Liability, Lisa M. Fairfax
Faculty Scholarship
It appears that our society has tacitly agreed to spare corporate directors any significant legal liability—which includes both financial and incarceration—for failing to perform their duties as board members. Thus, over the last twenty years, there has been a virtual elimination of legal liability—particularly in the form of financial penalties—for directors who breach their fiduciary duty of care. This is true despite the fact that we entrust directors with the awesome responsibility of monitoring all of America's corporations as well as the officers and agents within those corporations. More surprisingly, this tacit agreement against legal liability for directors has persisted …
Changing Paradigms: The Liability Of Corporate Groups In Germany, René Reich-Graefe
Changing Paradigms: The Liability Of Corporate Groups In Germany, René Reich-Graefe
Faculty Scholarship
The German law on affiliated companies and groups of companies ("Konzernrecht"), as embodied in the German Stock Corporation Act of 1965, as amended ("Aktiengesetz"), has often been credited for its innovative approach to the dichotomy of liability strategies relevant to corporate groups-viz., the traditional concept of entity liability based on the fundamental doctrine of the legal separateness of the corporate entity and, accordingly, resulting in a limitation of investor liability as the rule, and discrete and rare occurrences of what is almost poetically designated the "piercing of the corporate veil" ("DurchgriffshaJtung") as narrow and reluctantly crafted exceptions, and the more …
Uncovering A Gatekeeper: Why The Sec Should Mandate Disclosure Of Details Concerning Directors' And Officers' Liability Insurance Policies, Sean J. Griffith
Uncovering A Gatekeeper: Why The Sec Should Mandate Disclosure Of Details Concerning Directors' And Officers' Liability Insurance Policies, Sean J. Griffith
Faculty Scholarship
This Article explores the connection between corporate governance and directors’ and officers’ (D&O) insurance. It argues that D&O insurers act as gatekeepers and guarantors of corporate governance, screening and pricing corporate governance risks to maintain the profitability of their risk pools. As a result, in a well-working insurance market, D&O insurance premiums would convey the insurer's assessment of a firm's governance quality. Simply stated, firms with better corporate governance would pay relatively low D&O premiums, while firms with worse corporate governance would pay more. This simple relationship could signal important information to investors and other capital market participants. Unfortunately, the …