tag:blogger.com,1999:blog-1883551996126668365.post8759360067896626481..comments2024-01-11T21:24:44.379-07:00Comments on A Blog of Tom: Corporate SlaveryTom Cantinehttp://www.blogger.com/profile/06234109728445439457noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-1883551996126668365.post-6093996073028184602012-05-10T18:39:04.162-06:002012-05-10T18:39:04.162-06:00Making directors more personally responsible is on...Making directors more personally responsible is one approach, but it still seems to me a bit of a kludge. As well, there are some sorts of actions that corporations should be free to contemplate (such as deciding between fulfilling a contract and deliberately breaching it but paying the damages) that director liability can pose problems for. If the rational thing to do is to breach the contract, or even violate a safety regulation and pay the fine, then we need some principled means to change the rationale, not merely impose ad hoc sanctions in some cases while systematically ignoring others.<br /><br />Michael, you're right that the fiduciary responsibility is ultimately to the shareholders, but there's a corporate veil in the way, in part because (especially with publicly traded corporations) there are so many different shareholders with so many different and perhaps conflicting interests. Some shareholders may want the company to give its employees same-sex marriage benefits, for example, while others might be steadfastly opposed to doing so. Requiring directors to consider these sorts of shareholder interests would invite a nightmarish tangle of oppression claims. So the "interests of shareholders" (to which the fiduciary duty applies) boils down to only those interests the shareholders can be assumed to hold in common: the value of their shares.Tom Cantinehttps://www.blogger.com/profile/06234109728445439457noreply@blogger.comtag:blogger.com,1999:blog-1883551996126668365.post-25472229849355236652012-05-10T17:34:25.212-06:002012-05-10T17:34:25.212-06:00My understanding was that fiduciary responsibility...My understanding was that fiduciary responsibility was to the corporate shareholders as opposed to the corporation itself. Would that not mean that the best interests of the corporation would in fact be the best interest of the individual(s) with the controlling number of shares? [Note: I do realize that corporate shares can be owned by corporations, but ultimately this will track back to individual(s), however many layers of corporate ownership exist.]<br />So, ultimtely corporate decisions and policy are made by the indiviual shareholder(s) that control the corporation, who in fact are often the director(s). So corporate decisions that negatively impact the environment or local economies are ultimately the decisions of individuals acting in their economic interest whatever the consequences.<br />Mind, I don't think I've moved any closer to a solution. My only notion is an increase of directors' liability.Michaelhttp://www.facebook.com/michael.martin.3150noreply@blogger.comtag:blogger.com,1999:blog-1883551996126668365.post-59310691492892067422012-05-10T16:17:28.145-06:002012-05-10T16:17:28.145-06:00Sorry, Tom, can't think of any viable solution...Sorry, Tom, can't think of any viable solutions to this. In business school there were several suggestions, as well. But most of them centred around making the directors more personally responsible for acts that the corporation did that were against the best interests of society or broke laws.Johanus Haidnerhttps://www.blogger.com/profile/00896496300615845197noreply@blogger.com