Dividends, Discretion, and Disclosure

Brudney, Victor

doi:10.2307/1072504

Cited by 2 publications

(1 citation statement)

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“…In fact, since Ford v. Dodge Bros., courts have proven very reluctant to force corporations to pay out additional dividends or otherwise examine the economic wisdom of business decisions (Brudney, 1980). 4 In Grobow v. GM (1988), the board of directors was permitted to exercise its collective judgement that paying H. Ross Perot seven hundred million dollars in order to remove him from the board of directors was in the best interest of the corporation.…”

Section: The Asymmetry Of Legal Relationships Within the Corporate "Web"mentioning

confidence: 99%

Getting Real: Stakeholder Theory, Managerial Practice, and the General Irrelevance of Fiduciary Duties Owed to Shareholders

Marens¹,

Wicks²

1999

Bus Ethics Q

132

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Abstract:Stakeholder theorists have generally misunderstood the nature and ramifications of the fiduciary responsibilities that corporate directors owe their stockholders. This fiduciary duty requires the exercise of care, loyalty, and honesty with regard to the financial interests of stockholders. Such obligations do not conflict with the normative goals of stakeholder theory, nor, after a century of case law that includes Dodge Bros. v. Ford, do fiduciary responsibilities owed shareholders prevent managerial policies that are generous or sensitive to other corporate stakeholders. The common law recognizes a multitude of legal relationships between various corporate constituents, and fiduciary duties are only a subset of the obligations that arise from these relationships. This article argues that statute and case law can bring comparable legal protection to constituents other than stockholders, and suggests ways that these protections might be further strengthened. Implications for management education are also discussed.

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Section: The Asymmetry Of Legal Relationships Within the Corporate "Web"mentioning

confidence: 99%