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Law and Psychology

University of Michigan Law School

1981

Corporations

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Full-Text Articles in Law

Business Decisions By The New Board: Behavioral Science And Corporate Law, Robert J. Haft Nov 1981

Business Decisions By The New Board: Behavioral Science And Corporate Law, Robert J. Haft

Michigan Law Review

This Article's thesis is that, by reason of its recently secured independence from management domination, the boards of directors of large American corporations are now in a unique position to make business decisions of the highest quality, and that corporate law should respond to this potential appropriately. On the basis of findings in the behavioral sciences, this Article urges a limited rethinking of the role of the chief executive and the board of directors before the model of directors as "monitors" of the chief executive's performance is frozen in place. Already armed with information supposedly received as monitors, the independent …