Sunday, July 15, 2018

ICYMI: #corpgov Weekend Roundup (July 15, 2018)

July 15, 2018 in Stefan J. Padfield | Permalink | Comments (0)

Wednesday, July 11, 2018

ICYMI: #corpgov Midweek Roundup (July 11, 2018)

July 11, 2018 in Stefan J. Padfield | Permalink | Comments (0)

Sunday, July 8, 2018

ICYMI: #corpgov Weekend Roundup (July 8, 2018)

July 8, 2018 in Stefan J. Padfield | Permalink | Comments (0)

Wednesday, July 4, 2018

ICYMI: #corpgov Midweek Roundup (July 4, 2018)

July 4, 2018 in Stefan J. Padfield | Permalink | Comments (0)

Sunday, July 1, 2018

ICYMI: #corpgov Weekend Roundup (July 1, 2018)

July 1, 2018 in Stefan J. Padfield | Permalink | Comments (0)

Wednesday, June 27, 2018

ICYMI: #corpgov Midweek Roundup (June 27, 2018)

June 27, 2018 in Stefan J. Padfield | Permalink | Comments (0)

Sunday, June 24, 2018

ICYMI: #corpgov Weekend Roundup (June 24, 2018)

June 24, 2018 in Stefan J. Padfield | Permalink | Comments (0)

Wednesday, June 20, 2018

ICYMI: #corpgov Midweek Roundup (June 20, 2018)

June 20, 2018 in Stefan J. Padfield | Permalink | Comments (0)

Sunday, June 17, 2018

ICYMI: #corpgov Weekend Roundup (June 17, 2018)

June 17, 2018 in Stefan J. Padfield | Permalink | Comments (0)

Wednesday, June 13, 2018

ICYMI: #corpgov Midweek Roundup (June 13, 2018)

June 13, 2018 in Stefan J. Padfield | Permalink | Comments (0)

Sunday, June 10, 2018

ICYMI: #corpgov Weekend Roundup (June 10, 2018)

June 10, 2018 in Stefan J. Padfield | Permalink | Comments (0)

Wednesday, June 6, 2018

ICYMI: #corpgov Midweek Roundup (June 6, 2018)

June 6, 2018 in Stefan J. Padfield | Permalink | Comments (0)

Sunday, June 3, 2018

ICYMI: #corpgov Weekend Roundup (June 3, 2018)

June 3, 2018 in Stefan J. Padfield | Permalink | Comments (0)

Wednesday, May 30, 2018

ICYMI: #corpgov Midweek Roundup (May 30, 2018)

May 30, 2018 in Stefan J. Padfield | Permalink | Comments (0)

Sunday, May 27, 2018

ICYMI: #corpgov Weekend Roundup (May 27, 2018)

May 27, 2018 in Stefan J. Padfield | Permalink | Comments (0)

Wednesday, May 23, 2018

ICYMI: #corpgov Midweek Roundup (May 23, 2018)

May 23, 2018 in Stefan J. Padfield | Permalink | Comments (0)

Sunday, May 20, 2018

ICYMI: #corpgov Weekend Roundup (May 20, 2018)

May 20, 2018 in Stefan J. Padfield | Permalink | Comments (0)

Wednesday, May 16, 2018

ICYMI: #corpgov Midweek Roundup (May 16, 2018)

May 16, 2018 in Stefan J. Padfield | Permalink | Comments (0)

Monday, May 14, 2018

A Bit More on Executive Private Lives and Fiduciary Duties

I always have loved the game of tag, and I love a challenge.  More importantly, I love a conversation about business law . . . .

Last week, Steve Bainbridge posted a follow-on to posts written by Ann and me on the application of fiduciary duties to the private lives of corporate executives.  As Steve typically does in his posts, he raises some nice points that carry forward this discussion.  In a subsequent Tweet, Steve appears to invite further conversation from one or both of us by linking to his post and writing "Tag.  You're it."

Screenshot 2018-05-14 22.50.35
I do want to make two additional points.  First, I offer an endorsement of something Steve wrote in his post.  Specifically, Steve asks (with a small typo corrected): 

 . . . to what extent should a board have Caremark duties to monitor a CEO's private life. Personally, I think Caremark is not limited to law compliance programs. A board presented with red flags relating to serious misconduct--especially misconduct in a sphere of life directly related to the corporation's business (think Weinstein)--has a duty to investigate. But, again, does that mean the board should hire private investigators to track the CEO 24/7?

I agree that a board's duty to monitor is not limited to compliance programs.  Stone v. Ritter makes it plain that the duty to monitor arises from a director's obligation of good faith, situated within the duty of loyalty.  Assuming no "intent to violate applicable positive law" or an intentionally failure to act in the face of a known duty to act (demonstrating a conscious disregard for his duties)," however, under Disney, a failure to monitor in this context likely would not rise to the level of bad faith unless the board "intentionally acts with a purpose other than that of advancing the best interests of the corporation"--which seems unlikely (although someone with more time and creativity than I have at the moment may be able to spin out some relevant facts).  Of course, the Delaware Supreme Court could add to the Disney list of actions not in good faith . . . .  But absent any of that, it is unlikely that a board of directors' failure to monitor an executive's private life will result in liability for a breach of the duty of loyalty.

Second, I want to pass on a further thought on the debate--one that is not my own.  In an email message to me, co-blogger Stefan Padfield observed that corporate opportunity doctrine questions are fiduciary duty claims that extend into a fiduciary's private life--specifically, the fiduciary's usurpation of the opportunity for his or her private gain.  He also noted that from there the leap is not as far as it may seem to conceptualizing other aspects of an executive's private conduct as being within the scope of his or her fiduciary duties to the corporation.  This certainly provides more food for thought.

I want to thank Ann for stimulating all these ideas.  Her original post raised a nice question--one that obviously provokes and has encouraged engagement in thoughtful conversation.  While we have not yet resolved the issue, we have staked out some important ground that may be covered in extant or forthcoming cases.  As Ann's and Steve's posts point out, there are a number of intriguing fact patterns at the intersection of executives' private lives and fiduciary duties that may force courts to wrestle some of this to the ground.  I, for one, will be watching to see what happens.

May 14, 2018 in Ann Lipton, Corporate Governance, Corporations, Joan Heminway, Stefan J. Padfield | Permalink | Comments (4)

Sunday, May 13, 2018

ICYMI: #corpgov Weekend Roundup (May 13, 2018)

May 13, 2018 in Stefan J. Padfield | Permalink | Comments (0)