The Team Production Theory of Corporate Law: A Critical Assessment

Meese, Alan J.

doi:10.2139/ssrn.373783

“…130 By contrast, Nigerian corporate law culture places more emphasis on the shareholder primacy approach. This model of corporate governance believes that directors are ultimately trustees and agents of the stockholders of the company 131 and that "corporate law's objective is to develop legal structures that will maximize shareholder wealth". 132 This approach finds justification in the fact that a company is "an aggregate of its shareholders" 133 and "shareholders are not only owners but also risk bearers" 134 in the company.…”

Section: Difference In Corporate Law Culture and The Order Of Recognimentioning

confidence: 99%

An Examination of the Relevance of the Codification and Application of the American Business Judgment Rule to Nigerian Corporate Law

Ubochioma

¹

2020

J. Afr. law

1

0

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Abstract The business judgment rule is an ancient doctrine that was developed in the US. It seeks to prevent courts from reviewing directors’ decisions, on the basis that directors have the capacity and expertise to make business decisions. This article examines the desirability of applying the US business judgment rule in Nigeria. Through a comparative analysis, it argues that the peculiarities of Nigeria's corporate law and environment do not justify the application of the rule. More specifically, it contends that differences in the legal regime for derivative suits, standards of duty of care and skill, corporate law culture, and the distinct epoch in which the business judgment rule and the duty of care and skill were recognized in the US, make its application unnecessary in Nigeria. It concludes that the current statutory duty of care and skill should be retained to hold directors accountable for reckless business decisions.

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“… However, consider debates on the business judgment rule in relation to its consistency with 'team production theory' as inherent in the American tradition of company law (Blair and Stout, 1999;Meese, 2002), but also see the recent UK company law reform -especially the introduction of the directors' obligation to run the company "in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard"…. for the interest of stakeholders other than the "members" of the company (employees, customers, suppliers, communities and others), for the impact on the environment, and the company reputation conditioned by these relationships, which moreover states that when these further purposes are to be considered, beyond the interest of shareholders, the meaning of 'promoting the success of the company in the interest of its members' must be understood as if it included the pursuance of also these further purposes and interests.…”

Section: mentioning

confidence: 99%

A Rawlsian View of CSR and the Game Theory of its Implementation (Part I): the Multi-stakeholder Model of Corporate Governance

Sacconi¹

2011

Corporate Social Responsibility and Corporate Governance

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This is the first part of a comprehensive essay on the Rawlsian view of corporate social responsibility (in short CSR). CSR is defined as a multi-stakeholder model of corporate governance and objective function based on the extension of fiduciary duties toward all the firm's stakeholders (see sec. 2). A rationale for this idea is firstly given within the perspective of new-institutional economic theory in terms of transaction costs efficiency. From this perspective, abuse of authority in regard to the non-controlling stakeholders emerges as the main unsolved problem, and which makes it impossible to sever efficiency from equity within the domain of corporate governance (sec. 3). Intuitively, a Rawlsian principle of redress emerges as the natural answer to the legitimization problem of ownership and control rights allocations when, in order to provide incentive to one party (incentive to undertake important specific investments), they give it a disproportionate advantage over other non-controlling stakeholders. Moreover, in accordance with the prevailing opinion about its voluntariness, CSR is viewed here as a model of corporate governance that companies may undertake by autonomous selfregulation in terms of the explicit adoption of expressed self-regulatory norms and standards. This is to be understood as an institution in Aoki's sense of the term: i.e. roughly put, as a rule in the behavior of a group of players which is maintained through the repeated plays of a given game, thanks to a system of mutually consistent beliefs by players predicting each

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“… However, consider debates on the business judgment rule in relation to its consistency with 'team production theory' as inherent in the American tradition of company law (Blair and Stout, 1999;Meese, 2002), but also see the recent UK company law reform -especially the introduction of the directors' obligation to run the company "in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard"…. for the interest of stakeholders other than the "members" of the company (employees, customers, suppliers, communities and others), for the impact on the environment, and the company reputation conditioned by these relationships, which moreover states that when these further purposes are to be considered, beyond the interest of shareholders, the meaning of 'promoting the success of the company in the interest of its members' must be understood as if it included the pursuance of also these further purposes and interests.…”

Section: mentioning

confidence: 99%

A Rawlsian View of CSR and the Game Theory of its Implementation (Part I): The Multistakeholder Model of Corporate Governance

Sacconi

¹

2010

View full text Add to dashboard Cite

This is the first part of a comprehensive essay on the Rawlsian view of corporate social responsibility (in short CSR). CSR is defined as a multi-stakeholder model of corporate governance and objective function based on the extension of fiduciary duties toward all the firm's stakeholders (see sec. 2). A rationale for this idea is firstly given within the perspective of new-institutional economic theory in terms of transaction costs efficiency. From this perspective, abuse of authority in regard to the non-controlling stakeholders emerges as the main unsolved problem, and which makes it impossible to sever efficiency from equity within the domain of corporate governance (sec. 3). Intuitively, a Rawlsian principle of redress emerges as the natural answer to the legitimization problem of ownership and control rights allocations when, in order to provide incentive to one party (incentive to undertake important specific investments), they give it a disproportionate advantage over other non-controlling stakeholders. Moreover, in accordance with the prevailing opinion about its voluntariness, CSR is viewed here as a model of corporate governance that companies may undertake by autonomous selfregulation in terms of the explicit adoption of expressed self-regulatory norms and standards. This is to be understood as an institution in Aoki's sense of the term: i.e. roughly put, as a rule in the behavior of a group of players which is maintained through the repeated plays of a given game, thanks to a system of mutually consistent beliefs by players predicting each

show abstract

The Team Production Theory of Corporate Law: A Critical Assessment

Cited by 17 publications

References 25 publications

An Examination of the Relevance of the Codification and Application of the American Business Judgment Rule to Nigerian Corporate Law

An Examination of the Relevance of the Codification and Application of the American Business Judgment Rule to Nigerian Corporate Law

A Rawlsian View of CSR and the Game Theory of its Implementation (Part I): the Multi-stakeholder Model of Corporate Governance

A Rawlsian View of CSR and the Game Theory of its Implementation (Part I): The Multistakeholder Model of Corporate Governance

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