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The vast majority of 401(k) plan participants want access to investments that match their personal values, yet a small fraction of plans offer those types of investments. The culprit for the existing misalignment has been unstable regulation, which has discouraged plan fiduciaries from including some categories of investments, such as sustainable investments, on 401(k) plan menus. In late 2022, the Department of Labor issued guidance that for the first time explicitly states that fiduciaries do not violate their duty of loyalty by considering participant preferences when making investment-related decisions. This Article makes two unique contributions. First, it evaluates the research on participant preferences for sustainable investments. Second, it provides a framework that fiduciaries can use to assess and consider those preferences while simultaneously fulfilling their duties of loyalty and prudence. If fiduciaries adopt the framework developed in this Article, it could be a triple win. Data indicate, and experts believe, that employees will save more in their 401(k) plans if they have access to investments that support their personal values. An increase in retirement savings would help close the substantial pension gap that exists, particularly for young employees and women who are particularly vulnerable to under saving. Companies will benefit if employees place greater value on their 401(k) plans. And, the world would benefit from increased assets flowing to sustainable investments at a time when climate and social sustainability are close to or in crisis. [ABSTRACT FROM AUTHOR]

A common moral argument is that shareholders have a special status because of risk when considering the duties of corporate management. The privileges of this status usually include the idea that management should adopt the goal of maximizing shareholder wealth. We argue that modern financial theory demonstrates that this argument should be modified by the recognition of a principle of desert, the shareholder desert principle (SDP). Financial theory can usefully circumscribe the duty owed to shareholders and the extent to which risk bearing justifies a claim on corporate value. When combined with the SDP, the result provides management with a guideline for what is owed to shareholders before other stakeholder non-contractual claims may be satisfied. As such, our approach provides management with some guidance through the thicket of competing stakeholder claims. [ABSTRACT FROM PUBLISHER]

The duty of loyalty is a core duty under the legal framework for directors' duties. The concept as borrowed by China originates from the UK and has further developed into many variations across common law jurisdictions. The different legal environments and development history lead to divergences in elaborating the duty in common law jurisdictions. The divergences can provide useful references for countries that have adopted and intend to improve the duty so as to enrich the content of the duty and plug any gaps. Chinese company law is still struggling to deal with the abstract nature of the duty, its scope of application and the test to apply in determining whether it has been breached. In practice, the Chinese judiciary is attempting to understand the duty. Nonetheless, their efforts are not entirely successful because the law omits several core aspects of the duty: the test for determining whether the duty has been breached, the ability to contract out of the duty and an applicable definition or understanding of a conflict of interest. The common law literature can be used as a starting point to sketch out a reasonable structure for the design of a better duty of loyalty in China. [ABSTRACT FROM AUTHOR]

After over two decades of development, Chinese statutory directorial duties have evolved into two segments: the duty of care and the duty of loyalty. However, the duty of care is still difficult to apply. While an abstract and vague drafting style is a common characteristic of Chinese legislation, a survey of existing Chinese laws and administrative rules should assist in clarifying the duty of care requirements expected of directors. Considering the increasing significance of judicial precedents and the exemplary function of administrative sanctions, analysing recent duty of care cases is conducive to supplementing further information and deciphering myths surrounding the application of the duty of care mechanism in China. However, this analysis demonstrates that there are inconsistencies in the standards of care applied by courts and by the China Securities Regulatory Commission. The article finds that a clearer statutory standard of care should be introduced into the People's Republic of China Company Law. [ABSTRACT FROM AUTHOR]

This article reconsiders the dominant account of corporate law's duty of loyalty, which asserts that the courts have steadily relaxed standards of fiduciary scrutiny applied to self-dealing by corporate managers across more than a century of history to the great detriment of the shareholder interest. The account originated in Harold Marsh, Jr.'s foundational article, Are Directors Trustees? Conflict of Interest and Corporate Morality, published in The Business Lawyer in 1966. Marsh's showing of historical lassitude has been successfully challenged in a recent book by Professor David Kershaw. This article takes Professor Kershaw's critique a step further, asking whether the evolutionary erosion account continues to exert normative power in today's corporate governance context. The answer is that it does not, a result that obtains even though erosion of the standards that courts apply to management self-dealing has continued unabated ever since Marsh published in 1966, and even though there is no reason to think that management self-dealing benefits the shareholder interest. The result follows from the operation of the corporate governance system, which has assimilated and redeployed the erosion account's motivating insight that officer and director self-dealing transactions do not make cost-benefit sense from the shareholder point of view. Regulation backs up the norm of aversion. Disclosure rules make self-dealing transparent to shareholders, who have no reason to like self-dealing and who now stand ready and able to register their preferences regarding such matters in corporate boardrooms. At the same time, the requirement of a majority independent board makes self-dealing transactions by board members highly inconvenient, because self-dealing undercuts independence. The practice reflects all of this, as shown by reference to hand-collected datasets of self-dealing transactions at publicly traded companies and of litigation in respect of self-dealing transactions in the Delaware Chancery Court. The classic self-dealing transaction, although still a focal point of academic discourse on corporate fiduciary law, does not matter all that much in real world companies with dispersed shareholders. It is no longer an unsolved problem stemming from separated ownership and control. [ABSTRACT FROM AUTHOR]

A law of public office crystallized in Anglo-American law in the seventeenth and eighteenth centuries. This body of law--defined and enforced through a mix of oaths, statutes, criminal and civil case law, impeachments, and legislative investigations--imposed core duties on holders of public executive offices: officials needed to serve the public good, not their own private interests; were barred from acting ultra vires; could often be required to account to the public for their conduct in office; and needed to act with impartiality, honesty, and diligence. Officeholding came to be viewed as conditional, with officers removable for misdeeds. These substantive duties within the law of public office--even if not its enforcement structure--reflected something that looks similar to modern fiduciary duties of loyalty and care. In this Article, we extend the historical record describing this law of public office and make several new historical and theoretical claims. First, there are reasons to suspect that what we identify as the law of public office and what are now generally considered private fiduciary duties developed together and influenced each other. During the critical centuries we explore, the duties of officeholders such as trustees, executors, and corporate directors were developing alongside the duties of public officials such as tax collectors and government commissioners. Parliament and other actors repeatedly used the language of trust, trusteeship, guardianship, and account to define the law of public offices. Additionally, public law concerns about abuse of power and the need for honesty, fidelity, and altruism in service of others may have seeped from public law into private fiduciary law. Influential political theory about the monarchy and lesser magistrates also used trust and related legal language to set forth a fiduciary conception of public officeholding; the theoretical developments in political theory not only drew from legal concepts but also may have helped shape them. One Article cannot decisively establish whether the similarities in language, concepts, and timing were mere coincidence or rather evidence of some conscious codevelopment in the law of public offices and fiduciary law. Proving (or disproving) actual causal relationships will need to be the work of the future. We conclude with some potential implications for our research, should further work continue to confirm our findings here. In short, fiduciary political theorists should be less anxious about drawing from private law models, and private law fiduciary theorists might need to be less insistent on the purity of the private sphere. Our research agenda invites more mutual learning--both historically and for law and institutions today. [ABSTRACT FROM AUTHOR]

Perceived failures by the U.N. Security Council have been characterized as "betrayals of trust," which threaten to impact the strength of the Council's authority. In certain legal cultures, fiduciary law has been recognized as an effective legal mechanism to underwrite trust in the exercise of authority. This Article considers the potential value in applying the fiduciary construct to the Security Council setting as a way to consolidate trust. In doing so, it is necessary to unpack two different conceptions of the fiduciary construct: the precept of law (derived from domestic private law) and the precept of authority (sometimes described as public fiduciary theory). Interpreting the former precept as applicable to private interests and the latter to the public interest, this Article recognizes both precepts as applicable to relationships in which there is a legal expectation that those exercising control over another's interests will not exploit (duty of loyalty) or squander (duty of care) those interests. The central question is whether the U.N. Security Council can be said to exist in such a relationship, either with private individuals or entities or with some iteration of the international community more broadly. By reference to recent controversies, including privatization of public assets in Kosovo, sexual exploitation and abuse by U.N. peacekeepers, Security Council vetoes in the face of atrocity and due process failures in sanctions decision-making, this Article examines the extent to which the fiduciary construct can play a useful role in reinforcing trust in the Security Council setting. [ABSTRACT FROM AUTHOR]

The Model Rules do not define "directly adverse." These words limit a lawyer's freedom to accept clients and a client's ability to hire counsel of choice--this prohibition derives from the lawyer's duty of loyalty. When, then, is a matter directly adverse to a nonparty client simply because the outcome could harm its interests? The answer to that question, the subject of this Article, is where the boundaries of Rule 1.7(a)(1) have been blurred, leaving the courts and the bar without adequate guidance. By confusing Rule 1.9(a)'s protection of a former client's "interests" with Rule 1.7(a)(1)'s prohibition of direct adversity to a current client, courts have rewritten and expanded Rule 1.7(a)(1). This Article examines the current rules, discusses how they have been erroneously applied, and offers guidelines for a proper interpretation of directly adverse. [ABSTRACT FROM AUTHOR]

Copyright of Pro Futuro is the property of University of Debrecen and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

In the abstract, the limits on a lawyer's loyalty obligations could take several forms. For example, constraints on a fiduciary's loyalty obligations may be derived from a correct understanding of that fiduciary's loyalty itself. Indeed, violations might count as a form of disloyalty to the client. Alternatively, such constraints could stem from obligations owed to parties other than a lawyer's client, or even something more abstract like the rule of law. Notably, such constraints could be derived from legal principles that have nothing to do with fiduciary law. Each of these options is a conceptual possibility, contingent on the choices made by a given legal system. Constraints on a loyalty obligation that are implications of that loyalty obligation itself are defined here as internal. Constraints imposed from outside a given fiduciary loyalty obligation are defined as external. This paper seeks to deepen our understanding of a particular type of fiduciary loyalty (the loyalty owed by lawyers) by focusing on the role of such internal constraints, and in the process to elaborate on the scope of loyalty obligations more generally. This paper will also indicate why we should care about the internal/external distinction. Among other things, this distinction helps determine whether lawyers are better seen as private or public fiduciaries, and in practice it may bear on both judicial reasoning and legal compliance. [ABSTRACT FROM AUTHOR]

How, if at all, do motives matter to loyalty? We have argued that loyalty (and the duty of loyalty in fiduciary law) has a cognitive dimension. This kind of "cognitivist" account invites the counterargument that, because most commercial fiduciary relationships involve financial considerations, purity of motive cannot be central to loyalty in the fiduciary context. We contend that this counterargument depends on a flawed understanding of the significance of motive to loyalty. We defend a view of the importance of motivation to loyalty that we call the compatibility account. On this view, A acts loyally toward B only if A's motives are compatible with A's robustly assigning non-derivative significance to the interests of B. We show that the compatibility account describes the motivational structure of fiduciary loyalty and of loyalty as such. This account provides a realistic picture of motivation and helps respond to two broader criticisms of cognitivism: first, that attributing significance to motivation is paradoxical; second, that attributing significance to motive would make fiduciary law impossible to administer. We also show that the compatibility account can help explain features of ineffective assistance of counsel jurisprudence under the Sixth Amendment to the U.S. Constitution, which draws on the lawyer's duty of loyalty toward the client. [ABSTRACT FROM AUTHOR]

Loyalty is a central ideal in both legal ethics and fiduciary law, but recent theoretical approaches to legal ethics also emphasize the connection between the legal profession and the rule of law or democratic self-government. In order for lawyers to perform the role of securing relationships of mutual respect among citizens of a political community, the requirement of single-minded, partisan loyalty to clients may need to be relaxed. Fidelity to law may be in tension with fidelity to clients. This paper considers Daniel Markovits's strong conception of loyalty and his argument that it follows from necessary conditions for democratic legitimacy. Markovits contends that partisan advocacy is necessary to transform the attitudes of citizens in a way that causes them to internalize the community's scheme of legal rights and duties as the product of collective authorship by all affected citizens. In that sense, citizens can be said to internalize the requirements of the community's law. The paper then defends a more modest internalist approach to legal legitimacy and authority, in which giving a legal justification for some action necessarily means committing oneself to a practical stance toward the law that assumes one's membership in a political community and accepts the community's laws as reasons for action. [ABSTRACT FROM AUTHOR]

Standards governing the validity of conflict-of-interest transactions by corporate directors or others in dominant positions have significantly evolved from the early days of strict judicial condemnation to the current statutory provisions. These provisions place great faith in and emphasis on the judgment of disinterested directors or shareholders. This evolution has not been consistent among states, given that substantial variations exist regarding both statutory provisions and judicial interpretations. To illustrate the variations, this article examines and compares the Delaware and Model Business Corporation Act standards. The variations reflect the concerns that arise when a director's fiduciary duty of loyalty conflicts with the realities and demands of the commercial world. This article examines the evolution of conflict-of-interest standards and existing variations in light of two fundamental issues: (i) whether the combination of statutory and fiduciary standards obligates directors to obtain advance approval of conflict transactions and (ii) the capacity of shareholders to challenge conflict transactions on the grounds of fairness to the corporation, even after board or shareholder approval. The article concludes that statutory and fiduciary standards obligate directors to obtain advance approval of conflict transactions and provides recommendations for addressing these two issues in a manner consistent with statutory provisions and fiduciary standards. [ABSTRACT FROM AUTHOR]

The article discusses several Missouri-related legal cases involving topics such as employee liability for contract and loyalty breaches, the reversal of a national origin discrimination verdict, and the legitimacy of the prohibition of voir dire questions about prior claims. The State ex rel. City of Kansas City v. Harrell case, which deals with sovereign immunity against defamation, is examined.

The article discusses the reasons why a uniform fiduciary standard should be used to regulate robo-advisers in the U.S. financial services industry. Other topics include efforts by the Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA) to regulate robo-advisers, the regulation of robo-advisers as investment advisers under Investment Advisers Act of 1940, and the fiduciary duty of care and loyalty of investment advisers and broker-dealers.

The aim of this contribution is to critically analyze the substance of the duty of loyalty imposed on a director of a company by the New Civil Code and the Business Corporation Act, which came into force in the Czech Republic on 1 January 2014, and consider the consequences of a breach thereof. The interpretation of recodified Czech private law is ambiguous and conflicting and there is neither consistent interpretation nor any case law, while at the moment it is not clear to what extent existing case law applies to these laws. This comparative analysis of the Czech and English concepts of the duty of loyalty aims to indicate a possible interpretation of the transplanted duty of loyalty and discuss theoretical issues connected with directors' liabilty in recodified Czech private law. [ABSTRACT FROM AUTHOR]

The article reports that directors of companies must be acutely aware of and adhere to their fiduciary duties or risk exposure to personal liability during covid-19. It mentions fiduciary duties to the company and its stakeholders such as duty of care and duty of loyalty to act in good faith. It also mentions stockholders remains true even when a company approaches the zone of insolvency and directors are protected by the business judgment rule.

Fiduciary duties comprise an integral part of corporate law. It is generally understood that directors owe the corporation and its shareholders two fiduciary duties: the duty of care and the duty of loyalty. Although both duties are firmly established in corporate law, they are not treated equally. It is generally understood that the duty of loyalty is enforced far more rigorously than the duty of care. The justification for this dichotomy is twofold. First, differential treatment is appropriate because of the relative urgencies of the underlying subject matter: loyalty issues pose greater risks than do care issues. Second, the deference of the business judgment rule is made possible by the rigor of the entire fairness test: directors who are not conflicted can be trusted. In this Article, I demonstrate that the duty of loyalty is not enforced as rigorously as is commonly believed. Over fifty years ago, Professor Harold Marsh argued that the duty of loyalty had been watered down substantially over the preceding century. I argue that the diminishment of the duty of loyalty has continued and increased substantially since the time of his writing. I catalog various legal developments that have had the effect of curtailing the enforcement of the duty of loyalty significantly. As a result of these developments, I maintain that the corporate law reality does not currently match the corporate law theory. I argue that some sort of realignment is necessary: either the law must be amended to correspond to the theory, or the theory must be revised to reflect reality. [ABSTRACT FROM AUTHOR]

Delaware courts have long respected the right to contract in Delaware, and possibly no entity is afforded more privileges to set the boundaries of its corporate form than the Delaware Limited Liability Company. Unlike nearly every other state, Delaware permits LLCs to abolish the duties of care and loyalty in their operating agreements, but forbids companies to eliminate liability for "any act or omission that constitutes a bad faith violation of the implied contractual covenant of good faith and fair dealing." The problem with the phrase "bad faith violation" is that, when referencing a breach of the implied covenant of good faith and fair dealing, it implies that there exists a non-bad faith violation of the covenant. In determining whether or not "neutral faith" or "non-bad faith" violations of the implied covenant are permissible under Delaware LLC law, this essay argues that Delaware courts should look to the relatively short history of the covenant, the contractarian spirit of Delaware laws and courts, and section 18-1101 of the Delaware Limited Liability Company Act to hold that the implied covenant can only be violated in bad faith. [ABSTRACT FROM AUTHOR]

In the past decade, robo-advisors—online platforms providing investment advice driven by algorithms—have emerged as a low-cost alternative to traditional, human investment advisers. This presents a regulatory wrinkle for the Investment Advisers Act, the primary federal statute governing investment advice. Enacted in 1940, the Advisers Act was devised with human behavior in mind. Regulators now must determine how an automated alternative fits into the Act’s framework. A popular narrative, driven by investment advice professionals and the popular press, argues that robo-advisors are inherently structurally incapable of exercising enough care to meet Advisers Act standards. This Note draws upon common law principles and interpretations of the Advisers Act to argue against this narrative. It then finds that regulators should instead focus on robo-advisor duty of loyalty issues because algorithms can be programmed to reflect a firm’s existing conflicts of interest. The Note concludes by arguing for a shift in regulatory focus and proposing a two-part heightened disclosure rule that would make robo-advisor conflicts of interest more transparent. [ABSTRACT FROM AUTHOR]

The article discusses Florida's fiduciary duty law in relation to the legal aspects of the state's limited liability companies (LLCs) as of 2017, and it mentions the Florida Revised LLC Act and changes involving the state's statutes. The New York duty of loyalty case Meinhard v. Salmon is addressed, along with the concept of un-cabining fiduciary duties under Florida law. A duty to disclose and a Revised Uniform Limited Liability Company Act (RULLCA) are assessed.

For centuries, the duty of loyalty has been the hallowed centerpiece of fiduciary obligation, widely considered one of the few "mandatory" rules of corporate law. That view, however, is no longer true. Beginning in 2000, Delaware dramatically departed from tradition by granting incorporated entities a statutory right to waive a crucial part of the duty of loyalty: the corporate opportunities doctrine. Other states have since followed Delaware's lead, similarly permitting firms to execute "corporate opportunity waivers." Surprisingly, more than fifteen years into this reform experiment, no study has attempted to either systematically measure the corporate response to these reforms or evaluate the implications of that response. This Article offers the first broad empirical investigation of the area. Contrary to conventional wisdom, we find that well over one thousand public corporations have adopted waivers--often with capacious scope and reach. The Article thus establishes a central empirical fact that is an important baseline for further discussion: Public corporations have an enormous appetite for contracting out of the duty of loyalty when freed to do so. This analysis also sheds light on the high-stakes normative debate around the relationship between fiduciary principles and freedom of contract. What types of corporations choose to contract around default rules? When they do so, do such measures tend to bolster or thwart shareholder welfare? The Article develops an efficient contracting approach to explain why corporations--and their shareholders--might favor tailoring the duty of loyalty and presents evidence assessing the merits of Delaware's experiment. [ABSTRACT FROM AUTHOR]

Conventional wisdom holds that the fiduciary duty of loyalty is a prophylactic rule that serves to dete r and redress harmful opportunism. This idea can be traced back to the dawn of modern fiduciary law in England and the United States, and it has inspired generations of legal scholars to attempt to explain and justify the duty of lo yalty from an economic perspective. Nonetheless, this Article argues that the conventional account of fiduciary loyalty should be abandoned because it do es not adequately explain or justify fiduciary law’s core features. The normative foundations of fiduciary loyalty come into sharper focus when viewed through the lens of republic an legal theory. Consistent with the republican tradition, the fiduciary duty of loyalty serves prim arily to ensure that a fiduciary’s entrusted power does not compromise liberty by exposing her principal and beneficiaries to domination. The republican theory has significant advantages over previous th eories of fiduciary law because it better explains and justifies the law’s traditional features, including the uncompromising requirements of fi duciary loyalty and the customary remedies of rescission, constructive trust, and disgorgement. Significantly, the republican theory a rrives at a moment when American fiduciary law stands at a crossroads. In recent years, some politicians, judges, and legal scholars have worked to dismantle two central pillars of fiduciary loyalty: the categorical prohi bition against unauthorized conflicts of interest and conflicts of duty (the no-conflict rule), and the requirement that fiduciaries relinquish unauthorized profits (the no-profit rule). The republican theory explains why these effort s to scale back the duty of loyalty should be resisted in the interest of safeguarding liberty. [ABSTRACT FROM AUTHOR]

The article discusses the author's views about legal scholar and Professor Lyman Johnson's contribution to Delaware corporate law jurisprudence as of 2017, and it mentions a business judgement rule, fiduciary duties of care and loyalty, and the legal obligations of corporate officers. The concept of doctrinal sensibility is addressed, along with business enterprise law and various corporation law litigation matters such as the Delaware Supreme Court case Cede & Co. v. Technicolor Inc.

At first glance, corporate waste makes no sense. The very definition of waste--a transaction so one-sided that no reasonable business person would enter into it, an act equivalent to gift or "spoliation"--suggests that it would never occur, for what corporation would ever enter into a transaction so absurd? Yet waste claims are regularly made against corporate managers. Respected judges have downplayed waste as a "vestige" and described it as "possibly non-existent," the Loch Ness monster of corporate law; but waste survives. It is a remnant of ultra vires, a doctrine proclaimed largely dead for the last hundred years--but waste is not dead. It confounds our model of managerial responsibility; after decades in which corporate directors' and officers' duties have been focused into the fiduciary duties of care and loyalty, waste sits outside that framework, for historically waste isn't a fiduciary duty at all. This Article, the first modern survey of the corporate waste doctrine, discusses the origin of corporate waste, documents and explains its survival, and tentatively foresees its demise. [ABSTRACT FROM AUTHOR]

The article discusses the author's views about the concept of purposive loyalty which governs the advancement of a person's goals and purposes, and it mentions fiduciary loyalty, a corporate director's fiduciary obligations, and a beneficiary's best interests. The corporate law scholarship of professor Lyman Johnson is examined, along with a duty of loyalty, and affirmative devotion to a corporation. Best interests loyalty and the avoidance of self-interested behavior are examined.

The article discusses fiduciary duties in relation to corporate law in America, and it mentions the fiduciary enterprise concept which states that corporate law and fiduciary duties are rooted in legal, economic, and moral frameworks that affect how people behave and interact with one another in the marketplace. Contractualism and a duty of loyalty are addressed, along with the scholarship of law professors Lyman Johnson and David Millon.

Taking the duty of loyalty as a starting point, which we consider to be the director's core fiduciary duty, this paper aims at identifying the contours of good faith in corporate law and the interpretations of this institution in corporate governance. The objective of the paper is to demonstrate the autonomy of good faith, along with the duty of care and the duty of loyalty. The paper displays the traditional legal approaches of this institution, both in continental civil law and in common law literature and jurisprudence and exhaustively describes the obligations that compose or even define this concept. Due to its amplitude, the duty of good faith enabled courts to articulate subsidiary fiduciary duties that meet social changes and transformation within business law. By means of cited case law, the conclusion will show that due to the nature, content and effects of situations where specific obligations are met, these may not be incorporated as elements of the traditional duty of care or duty of loyalty. [ABSTRACT FROM AUTHOR]

This Article explores insider trading law's increasing focus on personal relationships, and the way in which the law has come to privilege professional over nonprofessional insider trading. The Article discusses how, in an effort to expand insider trading liability, the government has sought to irripose legal duties of loyalty and confidentiality on a host of personal relationships not otherwise subject to law--effectively basing civil and criminal penalties on "corruption" in purely personal relationships. At the same time, courts have adopted a business property rationale regarding the use of nonpublic information and declined to prevent companies from disclosing valuable nonpublic information to select market professionals, who may then lawfully trade. The current legal framework thus permits trading on tips by professional investors, while penalizing this same trading by others. This problem is demonstrated by the divergent outcomes in United States v. Newman and Salman v. United States. After Newman and Salman, personal relationships are likely to be an increasing focus of enforcement. Because of the disparate treatment of trading on tips by professional versus nonprofessional traders, however, this focus does little to advance overall market fairness. [ABSTRACT FROM AUTHOR]

Currently, Delaware corporate law prohibits the indemnification of violations of the duty of loyalty, acts or omissions not in good faith, intentional misconduct, knowing violation of law, and several other categories of transgressions. However, it permits the indemnification of breaches of the duty of care. In contrast, although the implied contractual covenant of good faith and fair dealing may not be waived, Delaware's alternative entity law places the duty of loyalty and the duty of care on equal footing insofar as it permits the waiver of both the duty of loyalty and the duty of care and statutorily provides indemnification for all claims. Chief Justice Leo E. Strine, Jr. and Vice Chancellor J. Travis Laster would change this scheme in part by prohibiting the waiver of the duty of loyalty in diversely-held alternative entities. Waivers of the duty of care would continue to be permitted in all Delaware alternative entities, and a duty of care waiver would be presumed in certain cases. How well-received the Strine-Travis proposal will be depends in part on the business community's views and expectations surrounding the duty of loyalty and the duty of care. It has always been assumed that stakeholders in the business community regard duty of loyalty violations differently from duty of care violations, and believe that the law should take the former more seriously than the latter. However, legal scholars have not empirically examined these propositions. This Article begins a long overdue exploration of the business community's expectations surrounding the duty of loyalty and the duty of care with a pilot survey. The survey was sent to 117 sophisticated executives, of whom 45 replied regarding their views of default duties in private companies and their perceptions of express waivers of the duty of loyalty or the duty of care in hypothetical public and private company scenarios. The respondents displayed significantly less support for the waiver in the duty of loyalty scenarios than for the waiver in the duty of care scenarios and least support overall for a waiver of the duty of loyalty when the company posited was publicly-owned. Definitive conclusions must be avoided based upon this very limited pilot survey. However, the study makes a contribution by pointing the way toward a new avenue of empirical legal research that explores attitudes toward and comprehension levels of internal governance laws. The Article analyzes the empirical findings against the backdrop of literature on trust, and recommends further empirical research to help gauge the business and investor community's reactions to the differential treatment of the duty of loyalty and the duty of care and its comprehension of waivers and indemnification rules. It explains why internal governance laws are now at a major crossroad and presents a policy analysis of alternative approaches to fiduciary duties. The Article recommends incorporating aspects of a Concession/Stakeholder vision of business entities into the Nexus-of-Contracts paradigm. Irrespective of which fiduciary duty reforms are finally adopted, it is argued that ethical training should be integrated into multiple law school courses in a coherent fashion beginning with contracts, agency law, business organizations, business planning, and estate planning. A similar integrated approach should be taken to strengthen ethics training in both the undergraduate and graduate business school curricula. [ABSTRACT FROM AUTHOR]

When investment banks advise on merger and acquisition (M&A) transactions, are they fiduciaries of their clients, gatekeepers for investors, or simply arm's-length counterparties with no other-regarding duties? Scholars have generally treated M&A advisors as arm's-length counterparties, putting faith in the power of contract law and market constraints to discipline errant bank behavior. This Article counters that view, arguing that investment banks are rightly characterized as fiduciaries of their M&A clients and thus required to loyally serve client interests. This Article also develops an analytical framework for assessing the liability rules that will most effectively deter disloyalty on the part of investment banks toward their M&A clients. Applying optimal deterrence theory, the framework shows why holding only banks liable for disloyalty is unlikely to effectively deter such disloyalty. Instead, it suggests the need for fault-based liability rules to be applied to corporate directors (of M&A clients) for their oversight of the banks they engage as well as the potential need for public enforcement of certain hard-to-detect conflicts. Applying this framework, this Article assesses existing law, focusing on recent Delaware decisions, generally supporting that law but arguing that it is unlikely to effectively deter advisor disloyalty. It suggests changes to addess the regulatory gap. [ABSTRACT FROM AUTHOR]

Purpose To analyze the Municipal Securities Rulemaking Board’s new rule outlining the standards of conduct and fiduciary duties applicable to municipal advisors.Design/methodology/approach This article contains a summary of new MSRB Rule G-42 and identifies key areas where the final version of MSRB Rule G-42 differs from the initial proposal.Findings New MSRB Rule G-42 represents another significant milestone in the MSRB’s development of a comprehensive regulatory framework for municipal advisors mandated under the Dodd-Frank Wall Street Reform and Consumer Protection Act and imposes significant requirements on municipal advisors.Originality/value Practical guidance from experienced securities and financial services lawyers. [ABSTRACT FROM AUTHOR]

The "conflicts quartet" of cases decided by the Supreme Court of Canada can be understood as part of a long-standing tension in Anglo-Canadian jurisprudence between two competing conceptions of a lawyer's professional identity. In the most recent of these cases, C.N. Railway v. McKercher, the Supreme Court conclusively preferred the loyalty-centred conception of the practice of law over the entrepreneurial conception. While the Federation of Law Societies of Canada amended its Model Code of Professional Conduct in 2014 in response to the Supreme Court's decision in McKercher, this article argues that those amendments did not go far enough. The authors propose a more substantial set of modifications to the Model Code to better entrench the duty of loyalty as a foundational principle of legal ethics. These amendments, they argue, would better reflect the reasoning in McKercher and would provide lawyers with a lodestar to guide their ethical judgement. [ABSTRACT FROM AUTHOR]

The article discusses several of the legal duties and responsibilities of directors of not-for-profit (NFP) corporations in Florida as of 2015, and it mentions Florida common law, as well as corporate bylaws and articles of incorporation. According to the article, directors of Florida NFPs owe duties of care, loyalty, and obedience to other parties such as beneficiaries and donors. Florida statutes and corporate law are examined, along with U.S. federal NFP rules and regulations.

An essay is presented on American labor law and a question about whether the "Restatement of the Law: Employment Law" treatise adequately addresses the legal aspects of restrictive covenants (noncompete agreements) and employee mobility as of 2015. The impacts of statutes such as the U.S. Patient Protection and Affordable Care Act on the nation's labor laws are examined, along with trade secret litigation, a duty of loyalty, and the legal rights of employees and employers.

An essay is presented which addresses the relationships between trust and confidence in the workplace as of 2015, and it mentions American employment law, the legal duties and obligations of fiduciaries, and information about contractualization and its limits in the U.S. Duties of loyalty and disclosure are examined, along with the legal aspects of the relationships between employees and employers. The law of agency is assessed, as well as lay understandings of fiduciaries.

The article focuses on the Great Britain House of Lords case Regal (Hastings) v Gulliver, related to no-profit rule which prohibits the corporation directors for violation of their duty of loyalty and making profits of fiduciary position, and mentions a proposal for abolishing the no-profit rule.

The article looks at the fiduciary duty of care in corporate law in the U.S. Topics discussed include the of the singular fiduciary concept involving duty of loyalty; benefits from the duty of care; the duty of loyalty's shortcomings; and importance of duty of care to pursue the beneficiaries' interests.

A shareholder who objects to a corporate political contribution can file a derivative lawsuit to challenge that contribution as a breach of management's duty of loyalty to the corporation. Such a lawsuit will face long odds, however, if it is founded upon a traditional theory for breach of the duty of loyalty, like waste or self-dealing. Yet, there is a better theory for a shareholder to employ when filing suit to challenge a corporate political contribution: bad faith. Bad faith is a better basis for challenging a corporate political contribution than either waste or self-dealing because bad faith is a more flexible concept than self-dealing and a less difficult standard to satisfy than waste. Even if she intends no harm, a director acts in bad faith when she (1) takes official action that is motivated primarily by any reason other than advancing the corporation's best interests or (2) consciously disregards her fiduciary duties. This Article identifies several examples of political contributions--both real and hypothetical--that are ripe for challenge as bad faith because they are made for reasons other than advancing the corporation's best interest. For example, a CEO acts in bad faith if she causes the corporation to make a contribution in support of her own political views or a friend who is running for office. However, in the absence of a " smoking gun," it will be difficult for a plaintiff to prove that the contribution was made for personal reasons rather than to advance the interests of the corporation. To overcome the difficulty of proving motive, this Article offers a novel argument: essentially all corporate political contributions made by large public corporations today constitute bad faith because they reflect management's conscious disregard for shareholders' political views. In our zero-sum, two-party political system, a board simply must know that a political contribution in support of a candidate from either major party will upset a substantial number (and perhaps a majority) of shareholders. What's more, although the duty of loyalty typically demands that management consider the best interests of the corporation as a whole, not individual shareholders, a different rule should apply to political contributions. The policy rationales for vesting decision-making power in the board, rather than shareholders or courts, simply do not apply to political contributions. Political matters are outside of management's core competence, and shareholders probably do not view management as a proxy for such matters. Further, political contributions differ greatly from most corporate spending, including charitable contributions. As a result, even if political contributions are not strictly ultra vires --i.e., beyond the corporate powers--they certainly verge on being ultra vires. When a board acts " in the vicinity of" ultra vires, its authority is at its lowest ebb; to shore up that authority, the board ought to consult the shareholders. If failing to poll the shareholders constitutes bad faith, boards wishing to contribute corporate funds in support of political candidates might nonetheless obtain protection of the business judgment rule in two ways. First, the board could submit a non-binding resolution to the shareholders at each annual meeting to gauge shareholder support for political contributions, generally, and also to gauge support for each major party. Second, management could establish a good faith reason for not consulting the shareholders for a specific contribution--for example, if the contribution directly and unambiguously promotes the corporation's core business. [ABSTRACT FROM AUTHOR]

This study examines the severity of the problem entailed by private benefits extraction in the corporate arena and, from there, underscores the need to fortify the legal treatment of the duty of loyalty of directors, where the author places the very heart of any meaningful corporate law. Following this examination, the author proceeds to identify the principal insufficiencies or imperfections that have traditionally beleaguered our legal framework and assesses the measures implemented by the recently adopted Law 31/2014 (amending the Companies Act to improve corporate governance) to mitigate them. This exercise enables the fundamental aspects of the duty of loyalty to be dissected, thereby revealing the basic structure of the new regulations. [ABSTRACT FROM AUTHOR]

The article discusses legitimacy of the neoliberal related to duty of loyalty of directors with reference to the Companies Act 2006 of the U.S. Topics discussed include reformulation of duty loyalty under section 172 of this Act does not make clear propriety of directorial conduct or behavioral standard, it can be difficult for the court if controversy appears over meaning of the act and how ideological context of the organization can define meaning of subjective nature of duty.

The article discusses the professional views of law professor Larry Ribstein and also presents views on Ribstein's fiduciary obligations. Topics discussed include his views on the importance of fiduciary duties and responsibilities in corporations and business associations, the importance of duty of loyalty as well as duty of care for corporations. It further discusses the importance of corporate governance.

Delaware corporate law embraces a "board-centric" model of governance contemplating that, as a general matter, all directors will participate in a collective and deliberative decision-making process. Rather than serving as a justification for a board majority to disempower directors elected or appointed by or at the direction of a particular class or series of stock or an insurgent group -- which we refer to as "blockholder" directors -- this system recognizes the need for a balancing of both majority and minority rights. In this article, we review the rights and duties of all directors and highlight cases where both board majorities and blockholder directors have overstepped their bounds. We caution that board majorities should deliberate carefully before taking action that limits a blockholder director's rights or excludes the blockholder director from participation in fundamental corporate matters. At the same time, we caution that blockholder directors should take care when exercising their rights, given that their affiliation with investors may make them vulnerable to duty of loyalty claims. We urge both sides to proceed with a sense of empathy toward the other and seek to make reasonable accommodations, and we emphasize the role that experienced corporate counsel can play in mediating disputes, resolving tensions, and striking the appropriate balance in the boardroom. [ABSTRACT FROM AUTHOR]

Fiduciary loyalty is usually understood as implying an exclusive claim held by the beneficiary over the exercise of fiduciary power by a fiduciary. The beneficiary is said to have a right that the fiduciary exercise fiduciary power exclusively in her interest. The fiduciary is said to be subject to a correlative duty to act solely in the interests of the beneficiary in acting on a fiduciary power. Fiduciary loyalty so understood is a jealous form of partiality-a conception largely, but not entirely, accurate. It captures the typical case in which the conduct of the fiduciary is constrained by proscriptive rules. But it ignores cases in which proscriptive rules must be held in abeyance because the fiduciary acts under an authorized conflict. Conflicted fiduciaries unsettle conventional wisdom about fiduciary loyalty. Supposing that a conflicted fiduciary cannot be expected to be exclusively partial to her beneficiary, in what sense can she nonetheless be expected to be partial to the beneficiary? Can a conflicted fiduciary have multiple but undivided loyalties? I f so, how does the conflictedfiduciary prove her loyalty ? Once the standard of conduct is determined, what remedies are available? In light of the Supreme Court of Canada's recent decision in Sun Indalex Finance, LLC v United Steelworkers, the author addresses these and other questions. He establishes a "demonstrable partiality standard" of loyalty, derived from previous cases involving conflicted fiduciaries, to guide a conflicted fiduciary's actions. The author then analyzes the use of constructive trusts as a remedy for breach offiduciary duty. He refines the test for determining the availability of a constructive trust and highlights the limits of its use in these situations. [ABSTRACT FROM AUTHOR]

Corporate mobility in Europe continues to be on the rise, both creating space for regulatory arbitrage by companies and influencing legislative decisions in corporate law and related fields. This has triggered debates in European company law that centre on questions of harmonisation, cross-jurisdictional convergence and the superiority of certain regulatory approaches and legal families. This article uses a large cross-country sample of EU Member States to classify legal strategies in corporate governance and assess claims of convergence and the superiority of legal families. We analyse board structure, the most important duties of directors, namely the duties of care and loyalty, questions of enforcement, and the position of directors in the vicinity of insolvency, and develop a taxonomy of legal strategies across the Member States. We find that, in spite of differences in regulatory technique and legal tradition, the effect of the legal strategies employed by the Member States is often remarkably similar and legal systems exhibit interconnections in the form of mutual learning across borders. In addition, we show that, in contrast to claims by parts of the literature, judicial innovation is not restricted to particular legal families. We argue that all legal families are, in principle, well equipped to react to new developments and draw on general or unwritten principles of law to fill regulatory gaps. However, a precondition for the emergence of effective rules seems to be a sufficiently large body of case law and, accordingly, access to the courts and an efficiently functioning judicial system. Consequently, we submit that questions of enforcement are of greater importance than a particular legislative or regulatory style. [ABSTRACT FROM AUTHOR]

The article focuses on the importance of dual representation of husband and wife co-debtors as set up by the American Bar Association (ABA) Model Rules of Professional Conduct. Topics discussed include the laws related to attorney and client relationship, the ethical rules of the U.S. Bankruptcy Code for defining consumer debt, and the duty of loyalty of the lawyers.

The article discusses the legal aspects of the stewardship of property in Great Britain as of May 2014, focusing on British agency laws, the powers and duties of corporate directors, and liability in relation to apparently improper distributions of corporate funds. The legal rights of express trustees are addressed, along with fiduciary duties and British remedies. A duty of loyalty is mentioned, along with the High Court of Australia, a proper purposes doctrine, and various fiduciary duties.

Whether public officers hold their powers in a fiduciary capacity has long been a subject of debate. The author does not focus directly on that debate, but takes the position that whether the notion of public fiduciary duties is interpreted literally or metaphorically, useful parallels can be drawn between discretionary decision making in public law and fiduciary duties in private law. The notion that public officers hold their powers in a fiduciary capacity can, in her view, help to refine the tort of misfeasance in a public office. The paper begins by describing the main areas of conceptual overlap between the tort of misfeasance in a public office and public fiduciary duties. The author then suggests the ways in which the principles underlying them can be mutually enlightening. First, she argues that the misfeasance tort can serve as an enforcement mechanism for notional public fiduciary duties, by providing a cause of action for anyone harmed by a bad faith breach of those duties. Second, she argues that looking at the tort's elements through a fiduciary lens can help to identify who qualifies as a public officer, what type of misconduct can ground an action, and how the public fiduciary duties that she sees as being owed to individuals can be balanced with those owed to the public at large. [ABSTRACT FROM AUTHOR]