A Case for Shareholders' Fiduciary Duties in Common Law Asia

Lim, Ernest

doi:10.1017/9781108629065

Cited by 21 publications

(2 citation statements)

References 271 publications

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“…Accordingly, UK courts have dealt with the abuse of majority power primarily through the unfair prejudice action, now codified in section 994 of the Companies Act 2006 (UK). 161 While English law protects minority shareholders through ex-post equity-based judicial review, 162 American law incorporates equity consideration by ex-ante constraints on the exercise of shareholder rights and powers. 163 Under Delaware law, controlling shareholders (much like directors and executives) owe fiduciary duties to the companies they control and to their minority shareholders.…”

Section: A Fiduciary Duties Of Controlling Shareholdersmentioning

confidence: 99%

Corporate Law and Governance Pluralism

Anidjar

2022

Can. J. Law Jurisprud.

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For the past several decades, jurists have invested significant efforts in developing the law in general—and private law in particular—in terms of pluralism. However, the conceptualization of corporate law and governance according to pluralist principles rarely exists. This Essay is the first in the legal literature to address this deficiency by providing a unique pluralist theory of corporate governance regimes. It distinguishes between the plurality of corporate law’s sources, values, and principles, and discusses the implications for governance. Moreover, based on the social systems’ thinking and the framework of complexity, this Essay provides theoretical grounds for skepticism about any policies or structures applicable to all times and contexts. Therefore, rather than perceiving corporate governance as being identically applicable to all corporations, the law must meet the challenge of complexity by designing governance arrangements following a firm-specific perspective. Furthermore, I argue that in conditions of complexity, corporate governance eco-systems should be designed with a firm-specific view that incorporates the effect of the corporation participants’ heterogeneity, the heterogeneity of its internal power relations, and the heterogeneity of industries and markets. These novel arguments have profound implications for redesigning fundamental legal doctrines—such as fiduciary duties of controlling shareholders, regulation of related party transactions, the officers’ duty of care, and the company purpose.

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Section: A Fiduciary Duties Of Controlling Shareholdersmentioning

confidence: 99%

Corporate Law and Governance Pluralism

Anidjar

2022

Can. J. Law Jurisprud.

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“…235 In the same manner, the primacy of shareholders in common law Asian countries is a strong tenet, although the corporate ownership structures are very different as they are usually characterised by concentrated family or state ownership of companies. 236 Shareholder-centric company law is further supported by economic ideology, whose qualities of objectivity and neutrality stand in contrast to tradition. However, ideological reinforcement for tradition has taken place as new shareholder actors have aligned interests and champion the same mantle.…”

Section: Shareholder Primacy and Minority Shareholder Protectionmentioning

confidence: 99%

Technology vs Ideology: How Far will Artificial Intelligence and Distributed Ledger Technology Transform Corporate Governance and Business?

Chiu

Lim

2020

SSRN Journal

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Sustainable Directors’ Duties and Reasonable Shareholders

Tjio

2023

Eur Bus Org Law Rev

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This paper will examine the sustainability of directors’ duties from two perspectives, namely that the duties are stable in their own right and that they cover enough ground for them to help achieve sustainable goals. First, we will examine how directors’ duties to act in a company’s best interest operate well when shareholder interests are aligned. These duties, when breached, can be ratified by shareholders given the traditional understanding that they are the company. This may, in turn, have been associated with the growing acceptance of shareholder primacy over the past 40 years, seen most recently in the UK Supreme Court decision in BTI v Sequana (2022). The Supreme Court, however, also discussed the limitations of shareholder ratification, and its interaction with the rules protecting creditors, particularly as regards capital maintenance. Those rules have, however, been weakened, and private law has had to step in to address the abuse those rules were aimed at. Where the substantive content of directors’ duties is concerned, the focus everywhere is on how to make directors take account of external constraints such as environmental, social and governance (ESG) concerns and corporate purposes that may contradict enhancing shareholder value (as well as existing shareholder protection) as an established paradigm of company law. We will also analyse the difficulties in accommodating the interests of other internal constituents, like creditors (some of whom may have been externalised). This paper will build on earlier suggestions that the proper purpose rule has a part to play in balancing the interests of corporate constituents both inter and intra se and even in considering the position of future shareholders. The test of what is in the best interest of the company may not provide enough balance in this regard, as seen perhaps from the recent failed derivative action sought by some shareholders of Shell against its directors, and directors should take account of the interest of the reasonable shareholder in capturing the gist of what ESG should aim at.

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A Case for Shareholders' Fiduciary Duties in Common Law Asia

Cited by 21 publications

References 271 publications

Corporate Law and Governance Pluralism

Corporate Law and Governance Pluralism

Technology vs Ideology: How Far will Artificial Intelligence and Distributed Ledger Technology Transform Corporate Governance and Business?

Sustainable Directors’ Duties and Reasonable Shareholders

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