Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Sunday, August 2, 2009

Heminway on Officer's Candor

Martha’s (and Steve’s) Good Faith: An Officer’s Duty of Loyalty at the Intersection of Good Faith and Candor, by Joan MacLeod Heminway, University of Tennessee College of Law, was recently posted on SSRN.  Here is the abstract:

This short paper begins to explore whether a corporate officer’s duty of good faith extends to public disclosures of personal facts. Specifically, the paper preliminarily attacks the following question: in the post Stone v. Ritter, post-Gantler v. Stephens era in which we now live, is the absence or inadequacy of an executive officer’s disclosure of personal facts a breach of the duty of good faith and, as a result, the fiduciary duty of loyalty under Delaware law? The answer to this question is tied up in recent jurisprudence of the Delaware Supreme Court at the intersection of the duty of good faith, the duty of disclosure (or candor), and the applicability of fiduciary duties to corporate officers. Accordingly, in a preliminary analysis, this paper first describes that jurisprudence and then applies it to executive disclosures of personal facts. The paper closes with a brief conclusion that includes a cautionary note about the use of its findings in a litigation setting.

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