It’s between two of legal academia’s best-known bloggers — Gordon Smith of The Conglomerate and Steve Bainbridge of the eponymous blog — and it concerns who should be more the boss in corporate governance, directors or shareholders. Catch it here.
Chronicling the high cost of our legal system
Schools for Misrule
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Business judgment is what directors are supposed to use to fulfill their fiduciary obligation to shareholders. The fiduciary obligation is paramount. When business judgment produces wealth not for the shareholders but for directors and senior managers, the fiduciary obligation has been breached.
The law needs to find a workable method of wreaking financial and additional ruin on those who breach fiduciary obligations. The punitive consequences should vastly exceed the money involved in the fiduciary failure.
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