Journal articles on the topic 'Economics of fiduciary duties'
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Reza, Syed Walid. "Officers’ fiduciary duties and acquisition outcomes." Financial Review 55, no. 1 (April 16, 2019): 91–119. http://dx.doi.org/10.1111/fire.12194.
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Ellison, Robin. "Dutch pension funds: Fiduciary duties and investing." Pensions: An International Journal 13, no. 3 (July 2008): 184–85. http://dx.doi.org/10.1057/pm.2008.15.
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Lam, Charles KN, and S. H. Goo. "Directors’ duties in the context of Confucianism." Journal of Financial Crime 22, no. 1 (January 5, 2015): 37–47. http://dx.doi.org/10.1108/jfc-05-2014-0022.
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Purpose – The purpose of this paper is to demonstrate how Confucianism can be applied in the areas that are now governed by company law in the common law system and how it can play a role in improving corporate governance. A gentleman in the context of Confucianism tends to be inclusive and broad-minded in embracing the interest of different stakeholders. In fact, he will balance the interests of shareholders and other stakeholders if there is any inherent conflict and try to achieve a win-win situation. Ultimately, he will run the company not just for profit-making but for social justice and commitment. Design/methodology/approach – The authors examine the leading cases in Hong Kong and the United Kingdom about the law of fiduciary duty and the duty of care and its relationship with Confucianism. In this respect, we review the teachings of the traditional Confucian texts and use Confucianism to fill in the gap where common law rules cannot reach. In addition, we adopt a comparative study approach in examining the law of directors’ duties in Hong Kong, China and the United Kingdom. Findings – It can be seen that the concept of fiduciary duty and duty of care is quite complicated and evolving and always subject to the interpretations of the court from time to time. For fiduciary duty, the term itself is quite conceptual and not immediately available to the general public. But loyalty in the context of Confucianism is a very lively and down-to-earth moral principle. Besides, fiduciary duty is imposed from outside, where directors had no choice but to accept. But loyalty in the context of Confucianism is something inherent and something from within. It is a moral principle that if you deeply understand the meaning of it, you will automatically accept it as a good virtue and your conduct will naturally be guided by such a principle. Confucianism can thereby be used to fill the gap where rules and regulations cannot reach. Confucian business ethics and common law rule should be complementary to each other in the development of a Chinese corporate governance system. Originality/value – This paper is the first of its kind in discussing the relationship between the law of directors’ duties and Confucianism. It argues that Confucianism plays a crucial role in guiding the behavior of the directors and can supplement the abstract principles of directors’ duties in the context of a Chinese corporate governance system.
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Gutiérrez, María, and Maria Gutierrez. "An Economic Analysis of Corporate Directors' Fiduciary Duties." RAND Journal of Economics 34, no. 3 (2003): 516. http://dx.doi.org/10.2307/1593744.
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Lutsenko, S. I. "FIDUCIARY GAME RULES AND THE GOVERNANCE NATURE IN THE COMPANY." Strategic decisions and risk management 10, no. 2 (July 30, 2019): 144–55. http://dx.doi.org/10.17747/2618-947x-2019-2-144-155.
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The author considers features of relationships between the fiduciary (management, board of director) and shareholders (beneficiaries). The nature of fiduciary relations is connected with «a critical resource» (assets) of the beneficiary. In the company economic interests of various participants (shareholders, management) face. Delegation discretion the shareholder to the management will allow to build together with the shareholder effective economic strategy of the company, under condition of execution of fiduciary duties. The management possesses administrative immunity within the limits of application of the business judgment rule. Actions of the management at transaction fulfilment should have real character, possess economic sense, a rationality and to promote achievement of economic benefit in the form of increase to shareholder value. The special attention is given to the fiduciary nature of interaction. Imposing of fiduciary duties on the management allows the beneficiary to protect the company from destruction of shareholder value. The shareholder should specify such game rules that the management was unable break them or, at least, cost of their infringement would be above reception of personal benefit. Fiduciary principles allow to soften the conflict between management and the shareholder. Besides, the fiduciary mechanism possesses a preventive element, keeping the company from destruction. The given obligation of loyalty protects resources of the shareholder from wrongful acts from the management. Fiduciary principles allow to balance economic interests between a management and shareholders.
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Latif, Bilal, Wim Voordeckers, Frank Lambrechts, and Walter Hendriks. "Multiple directorships in emerging countries: Fiduciary duties at stake?" Business Ethics: A European Review 29, no. 3 (March 11, 2020): 629–45. http://dx.doi.org/10.1111/beer.12275.
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Kroos, Peter, Mario Schabus, and Frank Verbeeten. "Voluntary Clawback Adoption and the Use of Financial Measures in CFO Bonus Plans." Accounting Review 93, no. 3 (September 1, 2017): 213–35. http://dx.doi.org/10.2308/accr-51892.
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ABSTRACT Firms trade off CFOs' fiduciary duties against their decision-making duties when designing CFO bonus plans. Decreasing bonus incentives tied to financial measures benefits CFOs' fiduciary responsibilities at the expense of motivating their decision-making duties. As prior research indicates that clawbacks increase personal misreporting costs through the loss of previously awarded compensation, we examine whether clawbacks allow firms to increase incentives in CFO bonus contracts. Based on a sample of U.S. firms between 2007 and 2013, we find that clawbacks are associated with greater CFO bonus incentives. We also find the increase in incentives to be more pronounced for CFOs relative to other executives. Our results are moderated by firms' susceptibility to misreporting. The relation between clawbacks and incentives is weaker when firms experienced internal control deficiencies, have larger abnormal accruals, when CFOs are more vulnerable to pressure from CEOs, and when audit committees have less financial expertise and prestige.
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Bens, Daniel, Sterling Huang, Liang Tan, and Wan Wongsunwai. "Contracting and Reporting Conservatism around a Change in Fiduciary Duties*." Contemporary Accounting Research 37, no. 4 (October 31, 2020): 2472–500. http://dx.doi.org/10.1111/1911-3846.12607.
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Gray, Joanna. "Dishonesty plus Breach of Fiduciary Duties can Add up to Fraud." Journal of Financial Crime 4, no. 1 (March 1996): 59–62. http://dx.doi.org/10.1108/eb025757.
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Díez, Carlos Gómez-Jara. "Honest Services Fraud as a Criminal Breach of Fiduciary Duties." New Criminal Law Review 18, no. 1 (2015): 100–128. http://dx.doi.org/10.1525/nclr.2015.18.1.100.
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From a comparative perspective, the challenges that American courts and legislators are facing when trying to construe an honest services fraud statute are familiar. Almost all European countries have a general provision that criminalizes any breach of fiduciary duties that brings about economic harm to the principal. The comparative inquiry also helps shed light on the way in which the offense should be defined in a future statute. First, honest services fraud should be treated as a separate offense that is different from fraud; more specifically, the offense of honest services fraud should be conceived as a midpoint between fraud and embezzlement. Second, this offense—which could be defined as a “disloyalty” or “mismanagement” crime—should be construed along the lines of a derivate action for breach of fiduciary duties, although with higher standards, given that its violation triggers criminal sanctions. Third, this new disloyalty offense should include elements that are not required by current law, including whether “actual” or “reasonably foreseeable harm” is caused and whether the breach of the fiduciary duty is the proximate cause of the actual harm. The time has come to create a freestanding general disloyalty offense that requires an actual or reasonably foreseeable harm to the corporation as a prerequisite to criminal liability.
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Greenfield, Kent. "Sticking the Landing: Making the Most of the Stakeholder Moment." European Business Law Review 26, Issue 1 (February 1, 2015): 147–71. http://dx.doi.org/10.54648/eulr2015009.
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This paper illustrates that the shareholder primacy model is still the prevailing model especially as the proponents of the stakeholder model have not come up with a theoretically sound alternative. It is argued that all corporations' principal stakeholders should be protected by the imposition of fiduciary duties on managerial decision makers. Homogeneity on corporate boards can reinforce thinking that leads to bad decision making. The findings of various researchers into behavioural economics are considered. It is pointed out that the interests of the shareholders are rarely, if ever, the same as those of other stakeholders. This supports the idea that a shift away from shareholder primacy is needed. The trade-offs that are often made in managerial decision making are represented graphically and discussed as an analytical tool supporting the central thesis that fiduciary duties with a broader range are the way to ensure that decisions take account of all relevant interests.
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Ju, Jinyul. "Corporate Governance and the Fiduciary Duties of Loyalty: A Comparative Law and Economics Approach." commercial cases review 33, no. 3 (September 30, 2020): 3–93. http://dx.doi.org/10.36894/kcca.2020.33.3.003.
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Bunting, William C. "A Simple Model of Corporate Fiduciary Duties: With an Application to Corporate Compliance." Review of Law & Economics 17, no. 3 (November 1, 2021): 583–614. http://dx.doi.org/10.1515/rle-2021-0013.
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Abstract This article models the duty of care as a response to moral hazard where the principal seeks to induce effort that is costly to the agent and unobservable by the principal. The duty of loyalty, by contrast, is modeled as a response to adverse selection where the principal seeks truthful disclosure of private information held by the agent. This model of corporate loyalty differs importantly with standard adverse selection models, however, in that the principal cannot use available contracting variables as a screening mechanism to ensure honest disclosure and must rely upon the use of an external third-party audit technology, such as the court system. This article extends the model to the issue of corporate compliance and argues that the optimal judicial approach would define the duty to monitor as a subset of due care – and not loyalty – but hold that the usual legal protections provided for due care violations no longer apply.
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Urtiaga, María Gutiérrez. "A contractual approach to the regulation of corporate directors’ fiduciary duties." Corporate Ownership and Control 1, no. 3 (2004): 72–80. http://dx.doi.org/10.22495/cocv1i3p7.
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Traditional American corporation statutes state that the business and affairs of the corporation shall be managed by a board of directors who act as fiduciaries of the corporation. The purpose of this paper is to explain the economic logic underlying the regulation of corporate directors’ fiduciary duties, placing special emphasis on the consequences of the adoption of protective measures for the directors such as indemnification and liability insurance.
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Young, Stephen B. "Fiduciary Duties as a Helpful Guide to Ethical Decision-Making in Business." Journal of Business Ethics 74, no. 1 (May 22, 2007): 1–15. http://dx.doi.org/10.1007/s10551-006-9126-1.
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Bruno, Sabrina. "Climate Corporate Governance: Europe vs. USA?" European Company and Financial Law Review 16, no. 6 (December 6, 2019): 687–723. http://dx.doi.org/10.1515/ecfr-2019-0027.
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According to economic literature, climate change is a financial factor: this is the logical premise of the European Directive N. 2014/95/EU requiring disclosure on the policies adopted by big corporations on climate change risks and opportunities. Through disclosure, climate change imprints the contents of directors’ duty of skill and care in Europe. On the contrary, in US there is no federal legislation or SEC regulations specifically on climate disclosure. Absent any binding decision yet, the current assessment of directors’ fiduciary duties under state law does not include consideration of climate change risks and opportunities according to American authors, even though fiduciary duties may evolve. The sole effective tool is the Martin Act. Levels of disclosure of US and EU corporations are therefore already significantly different both in terms of climate risks and opportunities. This situation can drive the financial sector to direct capital to Europe. Institutional investors in US have been trying to increase disclosure through shareholders’ proposals under Rule 14a-8 but these efforts have been recently undermined by the micro-management argument used by SEC. The conclusion is that the market cannot govern climate change by itself: because of regulation, European corporations are better positioned to mitigate the “carbon bubble”. What is at stake is the profitability of American corporations.
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Heaton, J. B. "Positive Equity Prices with Insolvency Under Legal Solvency Tests." Journal of Forensic Economics 27, no. 1 (January 1, 2018): 63–70. http://dx.doi.org/10.5085/434.1.
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Abstract It is well understood that the equity of an insolvent firm can trade for a positive price so long as there is some positive probability that the firm will become solvent at some future point. Currently, however, this insight exists in the case law in an informal sense, while its use in the financial economics literature is highly formalized and not tied to the legal solvency tests that experts, lawyers, and judges must apply in solvency litigation. A simple model of a debtor firm shows why a positive-equity value does not imply solvency under either of two widely-used legal solvency tests. This links a well-known financial economic insight to legal solvency tests. This is of practical importance as market evidence becomes more important in solvency litigation and as directors continue to face important questions of shifting fiduciary duties when the firm becomes insolvent.
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Xi, Chao. "Foreign solutions for local problems? The use of US-style fiduciary duties to regulate agreed takeovers in China." Journal of Chinese Economic and Business Studies 6, no. 4 (November 2008): 407–20. http://dx.doi.org/10.1080/14765280802431779.
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Hansen, David. "Sustainable Corporations in Non-Financial Sectors Through Optimal Design of Executive Pay." German Law Journal 14, no. 7 (July 1, 2013): 715–48. http://dx.doi.org/10.1017/s2071832200002005.
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It is commonplace in current legal scholarship that pay packages for executives that were not tied to the impact of these executives' policies on shareholder wealth maximization often caused harm to shareholder interests and their companies, especially in the long term. The no-pay-without-performance postulate is as old as the first global economic crisis of the 20thcentury – the deep depression. Since then, this postulate has been repeated and substantiated innumerous times by the majority of experts in corporate law and business economics, but without real success. There are, however, commentators who deny the existence of a link between skewed incentive pay, excessive risk-taking, and financial losses. They instead insist on the superiority of the traditional director-centric model of corporate governance, which would allegedly preserve the balance that has generally worked well between the limited role and limited liability of shareholders and the active role, fiduciary duties, and potential liability of managers, which allegedly renders additional executive pay regulation unnecessary.
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Susanto, Yoghi Arief, and Yeti Sumiyati. "PELANGGARAN PRINSIP TANGGUNGJAWAB PERUSAHAAN ASURANSI INVESTASI PERSPEKTIF PERUNDANG-UNDANGAN DAN HUKUM EKONOMI SYARIAH." Asy-Syari'ah 22, no. 2 (January 13, 2021): 313–36. http://dx.doi.org/10.15575/as.v22i2.9707.
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Abstract: The Board of Directors is an organ of the company responsible for the performance of the company, which in its duties must adhere to fiduciary duties, duties of skill and statutory duties. The purpose of this research is First, to review the responsibility of the board of directors of PT. Asabri against high-risk investments based on the laws and principles of Sharia economic law, Second, to review sanctions against violations of the principle of responsibility committed by the board of directors of PT. Asabri for high-risk investments. The method used in this research is normative juridical, analytical descriptive research specification with systematic interpretation data analysis method. The results of this study concluded. First, the responsibility of the board of directors of PT. Asabri is a personal responsibility, and responsibility in a rented way with members of the board of directors of PT. Asabri because of his negligence and indiction violated the principle of responsibility and violated the principle of Sharia economic law, thereby harming the company and having to reimburse a certain amount of losses. Second, sanctions against violations of the principle of responsibility, namely civil sanctions based on articles 1365 and 1366 of the Criminal Code, and criminal sanctions if the actions of the directors do not comply with the principle of responsibility can be ensnared with articles 398 and 399 of the Criminal Code.
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Srivastava, Paridhi. "A Sustainable and Inclusive Capitalist’s Epoch: A Modern Economic and Investment Theory for the Benefit of Our Common Future?" Business Law Review 41, Issue 5 (October 1, 2020): 187–98. http://dx.doi.org/10.54648/bula2020117.
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Re-allocation of capital in the economy is important to align the attention of the economic and investment environment from short-term profit generation at the cost of sustainable development to long-term value creation amidst the greatest social and environmental changes of our time. This article is set in the context of the growing awareness amongst economic actors, such as institutional investors who play an important role in the allocation of capital in the economy in the first place, on the need to encourage sustainable and inclusive capitalism using an Environmental, Social and Governance centric (ESG) investing approach to help achieve the goals of sustainable development. Nevertheless, a majority of institutional investors across the world consider ESG investing as a sheer moral obligation, which often creates a conflict with their fiduciary duties. This article seeks to analyse the conflict between the fiduciary duty (before and according to law) of loyalty and care owed to beneficiaries and a correlative duty (beyond and besides the law) of loyalty and care to promote sustainable development owed to future generations. An investor’s palpable dilemma: How does one draw a line between this duty and that duty? This article argues for application of the casuistry theory, an antiquated and uncredited art of moral reasoning, to reinterpret the modern prudent investor rule and bring the duty to promote sustainable development within the framework of the legally binding fiduciary duty owed to beneficiaries. This article will further scan the evolving legal jurisdiction of India, an important player in achieving the goals of sustainable development, on the adequacy of disclosures of ESG risks and performance indicators in the Indian capital markets compared to the developments in the UK, EU and USA, so as to disentangle the blurred lines between the causation and correlation of ESG performance with the financial performance of a company. environmental, social and governance centric investing approach (ESG investing), sustainable development, fiduciary duty of loyalty and care, correlative duty of loyalty and care, casuistry theory
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Camenzuli, Louise, and Andrew Korbel. "Climate change litigation: directors’ duties, legal developments and risk management." APPEA Journal 62, no. 2 (May 13, 2022): S226—S229. http://dx.doi.org/10.1071/aj21074.
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Climate change is being repositioned in commercial, financial and legal spheres as a matter that requires board-level strategic attention. With a broad-ranging consensus that climate change risks are material and reasonably foreseeable, activists are pursuing a myriad of legal challenges seeking to hold government and companies to account. As the law develops, a number of trends are emerging which will require companies and directors to adapt their response to climate-change-related risks. In particular, directors are required to adequately inform themselves as to the broader physical and economic consequences of climate change, to critically evaluate the implications for financial performance and risk management, to adapt their company’s strategic response, and disclose and report relevant information to stakeholders. These requirements need to be managed amid significant uncertainties and complexities about the impacts of climate change, and also as to realistic emissions reduction targets, offsetting, innovation, measurement and reporting methodologies. This paper outlines climate litigation trends to assist in equipping boards, directors and general counsel to understand and engage with their company’s exposure. In particular, we consider claims against government which are of relevance to companies, including challenges to project approvals on climate change grounds; as well as potential actions against companies, directors and advisors in respect of fiduciary duties, disclosures and greenwashing.
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FOX, DAVID. "CONSTRUCTIVE NOTICE AND KNOWING RECEIPT: AN ECONOMIC ANALYSIS." Cambridge Law Journal 57, no. 2 (July 1998): 391–405. http://dx.doi.org/10.1017/s0008197398000087.
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This article attempts an economic analysis of the policy formulated in Manchester Trust v Furness that constructive notice should not be made the basis of liability arising out of commercial transactions. It concentrates on instances of equitable liability for ”knowing receipt“ where the defendant is required to give restitution of funds which it received in breach of fiduciary duty. The article investigates the social costs of imposing a duty of inquiry on a person receiving misappropriated money in a commercial transaction. It concludes that there are strong economic reasons why a commercial recipient of money should not owe the same rigorous duties of inquiry commonly imposed in conveyancing transactions. However, once the standard of inquiry is adjusted to take into the exigencies of commercial dealings, there are no compelling economic reasons why constructive notice should be rejected as a possible basis of liability in knowing receipt.
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Bar-Hava, Keren, Sterling Huang, Benjamin Segal, and Dan Segal. "Do Independent Directors Tell the Truth, the Whole Truth, and Nothing but the Truth When They Resign?" Journal of Accounting, Auditing & Finance 36, no. 1 (July 4, 2018): 3–29. http://dx.doi.org/10.1177/0148558x18780801.
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We examine the informativeness and credibility of independent directors’ stated resignation reasons. We posit that having access to private information, directors may resign in anticipation of weak future underperformance to limit damage to their reputation and further have an incentive to mask the reason for the resignation. Results show likelihood of resignation increases with director’s reputation and weak future firm performance. In addition, the evidence is consistent with directors obfuscating the reason for departure by providing benign and unverifiable resignation reasons. Investors seem aware of the disclosure incentives of departing directors and react negatively to such resignations. However, investors, by and large, underreact to the resignation announcement, likely because of the benign reason given for the resignation. Our results suggest that notwithstanding the perception of outside directors’ impartiality and assumed interest alignment with shareholders, independent directors’ personal reputation concerns may conflict with the interests of shareholders to whom they owe fiduciary duties.
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Welsh, Michelle. "Realising the Public Potential of Corporate Law: Twenty Years of Civil Penalty Enforcement in Australia." Federal Law Review 42, no. 1 (March 2014): 1–22. http://dx.doi.org/10.22145/flr.42.1.9.
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Traditionally corporate law has been viewed as having characteristics that are commonly associated with private law. Largely this view developed as a result of the “law and economics” scholarship which dominated the corporate law debate, especially in the United States, in the last quarter of last Century. While the traditional “law and economics” approach supports the view that corporate law should be treated as a branch of private law, and that the state should have no role in its enforcement, other scholars, particularly those that adopt a progressive approach, argue that corporate law has, and should be recognised as having characteristics that are usually associated with public law. Arguably, an area of Australian corporate law that displays characteristics that are usually associated with public law is the statutory directors’ duties and the civil penalty regime that supports them. This enforcement regime gives the state through the corporate regulator, standing to take court based proceedings to enforce what are in effect, contracts that established corporate governance structures. This article seeks to determine the appropriate role of a public regulator in these circumstances. The questions considered are: whose interests should the public regulator represent when it is tasked with the responsibility of enforcing the statutory directors’ duties that largely codify fiduciary and common law duties? Given that the duties are owed by directors to their company should the primary role of the public regulator be to represent the interests of the company, and its shareholders, who have suffered a loss as a result of the alleged contravention of the directors’ duties or should the primary role of the public regulator be to act in the interests of the members of the larger community? In these situations what are the interests of the larger community? Drawing on regulatory theory the argument advanced in this paper is that despite the fact that the statutory directors’ duties codify what are in effect private rights between directors and their companies, the primary role of a public regulator is not to utilise the enforcement mechanisms at its disposal in order to obtain compensation for companies who have suffered a loss. Rather, the regulator's primary role is to act in the interests of the larger community by utilising the enforcement mechanisms at its disposal strategically in order to encourage greater compliance.
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Boscheck, Ralf. "Pharmacy Benefit Managers: Fixing Healthcare Market Failures or Straining Regulatory Logics!?" World Competition 40, Issue 3 (September 1, 2017): 459–69. http://dx.doi.org/10.54648/woco2017028.
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US healthcare spending has made healthcare market reforms a critical and ongoing priority of regulatory policy. Healthcare markets are intrinsically fragile simply because providers deliver heterogeneous services to generally ill-informed patients who cover only a fraction of the costs. Intermediaries respond to the root causes of failing market coordination by injecting knowhow, aggregating demand and screening supplies. But they themselves are subject to regulatory concerns, as non-transparent practices could give rise to deceptive conduct and the scale of operations may eliminate actual, or foreclose potential, competition. Pharmacy benefit managers (PBMs) are a case in point. PBMs organize the sale and reimbursement of prescription drugs between producers, pharmacists and diverse sets of private and public health plans. They are also the focal point in the current ‘drug-price blame game’ with independent pharmacists and drug producers zeroing in on PBMs as the main culprits. At the same time, the Federal Trade Commission (FTC) itself is called upon to reconsider its allegedly ‘laissez-faire’ position on healthcare markets, if only to avoid that a growing number of US states are to enact new regulations and licensing rules to curtail presumably abusive PBM behaviour. Observing the situation, Moody’s warned that if any of the legislative proposals aimed at reining in PBMs took hold, the value of the PBM model would be lost. Given the contradictory atmosphere, how is one to know whether structural relief is needed or, on the contrary, if overregulation should be averted? This article addresses some of the key issues emerging from the current debate. By way of introduction, section 1 sketches ‘PBMs: Market contexts and benefits’. Section 2 assesses ‘Monopolization fears and fiduciary duties’. Section 3 discusses ‘Federal enforcement actions and local regulatory capture’. Section 4 sums up.
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Day, M. "Fiduciary duties." Trusts & Trustees 15, no. 6 (June 12, 2009): 447–57. http://dx.doi.org/10.1093/tandt/ttp062.
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Choong-Kee Lee. "How Fiduciary duties and Non-fiduciary Duties operate?" Journal of hongik law review 16, no. 4 (December 2015): 331–63. http://dx.doi.org/10.16960/jhlr.16.4.201512.331.
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Miller, Paul B. "Justifying Fiduciary Duties." McGill Law Journal 58, no. 4 (October 23, 2013): 969–1023. http://dx.doi.org/10.7202/1019051ar.
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Fiduciary duties are critical to the integrity of a remarkable variety of relationships, including those between trustee and beneficiary, director and corporation, agent and principal, lawyer and client, doctor and patient, parent and child, and guardian and ward. Notwithstanding their variety, all fiduciary relationships are presumed to enjoy common characteristics and to attract a core set of demanding legal duties, most notably a duty of loyalty. Surprisingly, however, the justification for fiduciary duties is an enigma in private law theory. It is unclear what makes a relationship fiduciary and why fiduciary relationships attract fiduciary duties. This article takes up the enigma. It assesses leading reductivist and instrumentalist analyses of the justification for fiduciary duties. Finding them wanting, it offers an alternative account of the juridical justification for fiduciary duties. The author contends that the fiduciary relationship is a distinctive kind of legal relationship in which one person (the fiduciary) exercises power over practical interests of another (the beneficiary). Fiduciary power is a form of authority derived from the legal capacity of the beneficiary or a benefactor. The duty of loyalty is justified on the basis that it secures the exclusivity of the beneficiary’s claim over fiduciary power so understood.
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Urazova, Hanna. "The Doctrine of Fiduciary Obligations in Corporate Law Through the Prism of Fiduciary Legal Relations and the Principles of Justice, Conscience, Reasonableness and Loyalty." Problems of legality, no. 158 (September 30, 2022): 47–62. http://dx.doi.org/10.21564/2414-990x.158.262242.
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Topicality. The relevance of the study is due to the lack of a single approach to understanding fiduciary legal relations in civil studies, which prevents the disclosure of the essence of the doctrine of fiduciary duties; insufficient analysis of the concept of "fiduciary duties", which makes it impossible to determine the content of duties arising from the subject of fiduciary legal relations; the lack of clarification of the essence of the doctrine of fiduciary duties, which prevents its full application to the regulation of civil legal relations, the prosecution of persons who have fiduciary duties. The purpose of the article is to reveal the essence of the doctrine of fiduciary duties through the prism of fiduciary legal relations and the principles of civil law, in particular, justice, good faith, reasonableness and loyalty, using the example of corporate law. Research methods. A complex of methods was used in the study of the problem. The theoretical and methodological basis is dialectical, historical and comparative methods, with the help of which the processes of formation, development and application of the doctrine of fiduciary duties in Ukraine and foreign countries were investigated and a complex conceptual and categorical apparatus of this doctrine was developed. Methods of analysis, synthesis, logical generalization, scientific abstraction, and formal-logical methods were used. Using the classification method, groups of fiduciary duties were identified. The method of theoretical generalization made it possible to establish subjects that have fiduciary duties. Results. An analysis of fiduciary legal relations, their relationship with the doctrine of fiduciary duties, the mechanism of functioning of the latter in the Romano-Germanic and Anglo-American legal systems was carried out; special legal methods of interpretation of legal norms, with the help of which the conceptual principles of the functioning and development of the doctrine of fiduciary legal relations, as well as the directions of its practical implementation in judicial practice, are defined; the norms of the current legislation relating to fiduciary duty in corporate law, the application of the doctrine of fiduciary duty in the practice of the Supreme Court were investigated; the components of the doctrine of fiduciary duties are defined: fiduciary legal relations, fiduciary powers, fiduciary duties, principles of justice, good faith, reasonableness and loyalty; the essence of the doctrine of fiduciary duties in corporate law is revealed.
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Murdalov, Deni Ruslanovich. "Relevant issues of responsibility of the members of the board of directors." Юридические исследования, no. 6 (June 2020): 47–55. http://dx.doi.org/10.25136/2409-7136.2020.6.33455.
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This article explores most relevant issues of responsibility of the members of the board of directors in corporations, limited liability companies and joint-stock companies. The object of this research is the relations formed as a result of violations by the members of the board of directors of fiduciary duties imposed upon them. The subject is the norms that regulate responsibility of the members of the oversight council of corporations in civil law, related law enforcement practice, as well as the theoretical provisions of various experts. The main goal of this work consists in determination of relevant problems of the institution of responsibility in form of losses of the members of the board of directors in public and private companies. The scientific novelty lies in the analysis of relevant issues pertinent to responsibility of the members of the board of directors. Detailed analysis is conducted on case law of the courts of superior jurisdiction on the matter. The scientific novelty lies in identification of most urgent problems associated with exercising of authorities of the members of the board of directors and proposal of the mechanisms for improvement of their responsibility in the current legislation, namely with regards to allocation of responsibility for the decisions of higher authorities. The conclusion is made that the development of the institution of responsibility of the board of directors should correspond with the modern requirements, stimulate economic development, entrepreneurial initiative, allow the subjects of responsibility to predict the consequences of their actions (or inaction), and contribute to efficient fulfillment of their responsibilities.
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Warburton, A. Joseph. "Do fiduciary duties matter?" Corporate Governance: The international journal of business in society 11, no. 5 (October 18, 2011): 541–48. http://dx.doi.org/10.1108/14720701111176957.
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Conaglen, Matthew. "FIDUCIARY DUTIES IN CANADA." Cambridge Law Journal 69, no. 3 (November 2010): 450–52. http://dx.doi.org/10.1017/s000819731000070x.
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Trope, R. L. "Directors' digital fiduciary duties." IEEE Security and Privacy Magazine 3, no. 1 (January 2005): 78–82. http://dx.doi.org/10.1109/msp.2005.11.
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Brisov, Yu V. "Responsibility of the Executive Body of a Legal Entity for Fraud." Actual Problems of Russian Law, no. 9 (October 5, 2019): 174–84. http://dx.doi.org/10.17803/1994-1471.2019.106.9.174-184.
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The paper discusses various legislative and enforcement approaches in the Russian Federation, USA, and Great Britain; compares the various provisions of the Plenums of the Supreme Arbitration Court of the Russian Federation and the Armed Forces of the Russian Federation on issues of good faith; analyzes the application of these provisions by the courts when considering issues of holding directors to account as a result of malpractice that entailed property damage. By the example of consideration of a number of key cases from the law enforcement practice of the courts of the Anglo-American system of law, the question of the use of tests is considered: objective and subjective integrity tests to regulate the issue of holding the executive body accountable. English and American courts resort to the criterion of good faith in very rare cases, and the fiduciary duty of directors in commercial companies was significantly limited. The approach used by the common law courts implies a minimal degree of court interference in the economic affairs of commercial companies. Holding the director accountable is allowed only in case of obvious neglect of duties or is considered in some cases based on the specific circumstances of the case. Russian courts often hold directors accountable not as a result of gross negligence or proven intentional actions by executive bodies to harm the company, but as a result of society not achieving the desired economic result. Besides, dishonesty compensates for obvious gaps in the internal corporate routine, which do not make it possible to precisely determine the boundaries of authority and the area of responsibility of the executive body. The author formulates a conclusion on the degree of admissible judicial discretion when applying the provisions on good faith to corporate relations as requiring special regulation.
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Lutsenko, S. I. "BUSINESS PROFITABILITY AND MONETARY POLICY OF THE STATE." Strategic decisions and risk management 13, no. 4 (February 16, 2023): 326–32. http://dx.doi.org/10.17747/2618-947x-2022-4-326-332.
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The author examines the features of the management policy and the monetary policy of the state on the profitability of the activities of Russian public companies (business profitability). The tightening of the monetary policy of the state (in particular, the growth of the key rate of the Bank of Russia without reference to the return on assets) may negatively affect the profitability of economic activity. The indicator of dividend payments is a signal for shareholders and potential investors. In addition, dividend payments are an indicator of the financial limitations of companies. Financial constraints are associated with the problem of adverse selection of financing - the choice of a source of financing taking into account its price. Effective management of current assets will allow rational use of them as an additional source of investment. The indicator of the contribution of management or internal growth allows you to evaluate external factors: market fluctuations, macroeconomic features, as well as the actions of financial speculators. This indicator establishes the real contribution of management to the value of the company. Systematic unprofitability of the company’s economic activity is a consequence of short-sighted financial policy or erroneous strategic decisions on the part of management. Management acts in accordance with fiduciary duties of integrity and reasonableness in the interests of the company and its shareholders expecting an increase in the value of the business. Therefore, the management decision should be made from the position of maximising market capitalisation. Then Russian public companies will act in the logic of a precautionary motive, saving a significant part of the funds for subsequent investment in priority projects under conditions of financial restrictions and sectoral sanctions. The growth of sales provides additional opportunities for the company to invest. The Wald, Breusch – Pagan and Hausman tests were carried out in order to identify an adequate forecasting model.
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Miller, Paul B. "A Theory of Fiduciary Liability." McGill Law Journal 56, no. 2 (April 28, 2011): 235–88. http://dx.doi.org/10.7202/1002367ar.
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The law of fiduciaries has been developed in an unprincipled manner. Consequently, the common law lacks a clear idea of the nature of the fiduciary relationship, the justification for fiduciary duties, and the purpose of fiduciary remedies. However, according to the author a principled theory of fiduciary liability may be derived from the common law. The focal point is the recent decision of the Supreme Court of Canada in Galambos v. Perez. The theory of liability suggested by Galambos and developed by the author is based on the conventional notion that fiduciary liability is premised upon the existence of a fiduciary relationship. The author argues that a clearer account of the nature and normative significance of the fiduciary relationship is critical to developing a sound understanding of the nature and scope of fiduciary duties. Under the theory developed by the author, the fiduciary relationship is treated as a distinctive kind of legal relationship. It is one in which one person (the fiduciary) wields discretionary power over the practical interests of another (the beneficiary). According to the author, fiduciary duties are explicable solely in terms of normatively salient qualities of the fiduciary relationship. The author explains these qualities and shows how they support and limit the incidence of fiduciary duties.
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Ibrokhimov, Azimjon. "FIDUCIARY DUTIES IN THE MANAGEMENT OF THE CORPORATION AND THEIR APPLICATION IN UZBEKISTAN." Review of Law Sciences 5, no. 4 (December 24, 2021): 66–73. http://dx.doi.org/10.51788/tsul.rols.2021.5.4./stdq1959.
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At present, comprehensive reforms are being implemented to improve civil law in our country. This can also be seen in the rules of corporate law. In particular, one of the reforms is related to the fiduciary duties of the managers of the legal entity. In corporate law, the fiduciary duties of the governing body of a legal entity are one of central issues. Proper and effective management of a legal entity is largely determined by the extent to which the fiduciary duties of the governing bodies are regulated and adhered to. Failure to comply with fiduciary duties is also the basis for liability of the governing body to the legal entity. Anglo-American corporate law states that the fiduciary duties of the managers of a corporation consist of duty of due care, duty of loyalty, and duty of good faith. The corporate law of the Russian Federation provides that the governing bodies of a legal entity must act in good faith and reasonably in the interests of the legal entity, and violation of these fiduciary duties is the basis of their responsibility to the legal entity. This paper analyzes the fiduciary duties of the management bodies of legal entities based on the legislation and judicial practice of the United States and the Russian Federation and discusses the prospects for applying and improving these duties in the corporate law of the Republic of Uzbekistan.
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Marcoux, Alexei M. "A Fiduciary Argument Against Stakeholder Theory." Business Ethics Quarterly 13, no. 1 (January 2003): 1–24. http://dx.doi.org/10.5840/beq20031313.
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Abstract:Critics attack normative ethical stakeholder theory for failing to recognize the special moral status of shareholders that justifies the fiduciary duties owed to them at law by managers. Stakeholder theorists reply that there is nothing morally significant about shareholders that can underwrite those fiduciary duties. I advance an argument that seeks to demonstrate both the special moral status of shareholders in a firm and the concomitant moral inadequacy of stakeholder theory. I argue that (i) if some relations morally require fiduciary duties, and (ii) the shareholder-manager relation possesses the features that make fiduciary duties morally necessary to those relations, then (iii) stakeholder theory is morally lacking.
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Rotman, Leonard I. "Understanding Fiduciary Duties and Relationship Fiduciarity." McGill Law Journal 62, no. 4 (February 2, 2018): 975–1042. http://dx.doi.org/10.7202/1043160ar.
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How well do we truly understand the legal concepts we regularly use and discuss? Truly understanding a legal concept necessitates understanding why it exists, what it was constructed to accomplish, and the purpose or purposes it was intended to facilitate. A lack of attentiveness to that raison d’être results in the loss of connection between the concepts and their underlying rationales. The divorce between legal concepts and their philosophical foundations renders the former susceptible to manipulation and misuse as they lose their connection to their philosophical and doctrinal foundations and subsequently become more and more unintelligible. As it presently sits, fiduciary jurisprudence is one of the most confused and least understood areas of contemporary law. This is not a new development, but one of long standing. Jurisprudence and legal commentary indicate that both lawyers and judges misuse fiduciary principles for reasons inconsistent with fiduciary law’s conceptual foundation. The primary purpose of this article is to enhance the understanding of fiduciary duties and relationship fiduciarity by promoting a more robust understanding of the fiduciary concept centred upon its foundational raison d’être. In the process of establishing a stronger philosophical and doctrinal base for the fiduciary concept, the article will also contemplate the contributions provided by of one of the more recent additions to fiduciary law scholarship, authored by Remus Valsan and published in a recent issue of this same law journal.
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Kulaha, E., and O. Melnychenko. "LEGAL STATUS OF SUPERVISORY BOARDS OF STATE-OWNED JOINT-STOCK COMPANIES." Bulletin of Taras Shevchenko National University of Kyiv. Legal Studies, no. 115 (2020): 35–40. http://dx.doi.org/10.17721/1728-2195/2020/5.115-8.
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The purpose of this work is to analyse the current state of regulation of the supervisory boards of joint stock companies in Ukraine, in particular the features of their work on state-owned enterprises. A review of the practical aspects of regulating the activities of supervisory boards of joint stock companies in Ukraine is made. By applying analytical methods the provisions of regulations in the field of corporate law the latest changes in the legal status of supervisory boards of joint-stock companies are studied, and their applicability to state joint-stock companies is assessed. In addition, these changes are compared with the provisions of international standards in the field of corporate governance of state-owned enterprises, in particular the standards of the Organization for Economic Cooperation and Development (OECD). The article deals, inter alia, with the concepts of "supervisory board", "state-owned enterprise", "fiduciary duties", as well as issues of transparency and integrity of the work of supervisory boards. In addition, the issues of the latest practice in the work of supervisory boards of state-owned joint stock companies and how the powers of the supervisory boards were exercised are considered. According to the results of the study, the current regulations are quite complex, inconsistent and contain internal contradictions, which, on the one hand, create risks for the effective exercise of powers by supervisory boards, and on the other hand, the risks of abuse by supervisory boards. The authors concluded that it is necessary to improve the legal framework governing the work of supervisory boards of state-owned joint-stock companies, generalize and unify practices on various issues of competence of supervisory boards, as well as provide certain criteria for compliance of supervisory board members with professional experience requirements in a particular field and with requirements of transparency about the absence of conflict of interest.
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Sepp, Katrin. "Legal Arrangements Similar to Trusts in Estonia under the EU’s Anti-money-laundering Directive." Juridica International 26 (November 13, 2017): 56. http://dx.doi.org/10.12697/ji.2017.26.06.
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According to EU Directive 2015/849, all Member States must establish a central register of data on ultimate beneficial owners of corporate legal entities and also of trusts and legal arrangements similar to trusts. First of all, this requires identification of the latter arrangements in the individual Member States, which is not an easy task: the definition related to being ‘similar to trusts’ is quite vague. The main aim with the article was to determine the arrangements in Estonian private law that should be considered in implementation of the UBO-register rules. Therefore, a brief overview is provided of trusts and two types of arrangements used in civil-law systems for the same purposes – the Treuhand and fiducie. The piece then highlights the similarities between these and the trust, with the conclusion being drawn that being ‘trust-like’ in the context of the directive boils down to situations wherein from the outside the property has one person as an owner but there also exists an internal relationship that obliges the title-holder to observe certain duties and that may grant another person the economic benefit from the property. Next, the article turns to the Estonian legal scene. Under consideration are family- and succession-law devices (e.g., executorship of a will), various forms of shared ownership and communities (in particular, silent partnership and contractual investment funds), mandate and commission contracts, intermediated holding of securities, and fiduciary ownership for security purposes. The conclusion is that there indeed are arrangements in the Estonian legal system that fall into the category of trust-like arrangements under the directive but that the registration of UBO data for all of them would not be without difficulties. Finally, some criteria for registration of the relevant arrangements are proposed.
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Tingle, Bryce C., and Eldon Spackman. "Do Corporate Fiduciary Duties Matter?" Annals of Corporate Governance 4, no. 4 (2019): 272–326. http://dx.doi.org/10.1561/109.00000023.
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McLaughlin, Robert M. "Risk Management and Fiduciary Duties." AIMR Conference Proceedings 1999, no. 3 (August 1999): 20–31. http://dx.doi.org/10.2469/cp.v1999.n3.4.
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Levmore, Saul. "Strategic Delays and Fiduciary Duties." Virginia Law Review 74, no. 5 (August 1988): 863. http://dx.doi.org/10.2307/1073196.
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Lim, Ernest. "Contracting out of fiduciary duties." Common Law World Review 44, no. 4 (November 27, 2015): 276–97. http://dx.doi.org/10.1177/1473779515616035.
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Keller, Simon. "Fiduciary Duties and Moral Blackmail." Journal of Applied Philosophy 35, no. 3 (July 1, 2016): 481–95. http://dx.doi.org/10.1111/japp.12234.
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Kgarabjang, Tshegofatso. "Evaluation of governance challenges associated with the exercise of fiduciary duties by the board members of the state-owned entities." Corporate Law and Governance Review 2, no. 1 (2020): 8–17. http://dx.doi.org/10.22495/clgrv2i1p1.
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There are fundamental challenges encountered by the non-executive directors (board members) of state-owned entities in a course of exercise of fiduciary duties. These challenges are, inter alia, conflict of interests, failure to uphold the fundamental principles of corporate governance, lack of necessary skill and competencies, and this impact on the ultimate performance of the company. The article seeks to evaluate the potential challenges encountered by board members of state-owned entities in the course of exercise of their fiduciary duties. The results indicate that failure to comply with fiduciary duties may have drastic effects on a state as a shareholder and may lead to a decline in corporate governance of state-entity. The article will make a brief reference to fiduciary duties in terms of common law, the Companies Act, PFMA and King IV, secondly examine potential challenges and thirdly conduct a comparative approach with the international instruments with the aim of making recommendations/best practices. The article makes reference to various case laws dealing with fiduciary duties, journal articles, internet sources and textbooks, common law and legislations.
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Ghahramani, Salar. "Business Ethics, Contractarianism, and (Optional?) Fiduciary Duties in Corporate Law." Business Law Review 39, Issue 1 (February 1, 2018): 20–24. http://dx.doi.org/10.54648/bula2018005.
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Fiduciary law is in a perpetual state of evolution – yet its application to corporate law remains a constant. This article examines the role of fiduciary law in limited liability companies (LLCs) and advances the view that the examination of the LLC/fiduciary nexus may instruct legal theorists as to whether fiduciary law has ethical origins or is strictly contract based. The analysis, the article concludes, helps understand whether fiduciary duties exist only if denoted in a contract, or whether there are overarching ethical and judicial principles that render certain business relationships fiduciary by nature.
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Penhall, Winston. "Fiduciary duties of UK investment managers and conflicts: the arch financial products case." Journal of Investment Compliance 16, no. 3 (September 7, 2015): 43–48. http://dx.doi.org/10.1108/joic-06-2015-0037.
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Purpose – The article analyses the findings of the Court in the Arch Cru case relating to manager fiduciary duties under English law and conflicts of interest compliance failings. Design/methodology/approach – This article summarises the Arch Cru case with a focus on fiduciary duties and practical compliance suggestions for conflicts of interest situations. Findings – The article addresses in particular the novelty of the fiduciary duty finding in the Arch Cru case and the justifiable concerns that compliance officers may have going forward given the nature of the regulatory enforcement approach taken by the FCA. Practical implications – The article highlights the nature of the fiduciary obligations owed by managers under English law together with a brief analysis of the causes of action for breach of fiduciary duty and the linkage to regulatory compliance obligations. Originality/value – The article is of value to investment managers, their compliance officers and general counsel where the manager provides investment management services under English law because it provides insight into the nature of investment manager fiduciary duties under English law and the impact of breaching those duties in a conflicts of interest scenario.