Private Law Theory

“In the wake of recent corporate governance scandals around the world, policymakers have called for increasing the independence of directors as well as their accountability to shareholders. One potential lever that has received considerable attention by regulators is personal liability. In theory, imposing personal liability for corporate malfeasance should improve directors’ incentive to monitor management and reduce agency problems. On the other hand, the fear of personal liability could deter individuals from serving as directors or make them risk-averse and thereby reduce board effectiveness …” (more)

[S Lakshmi Naaraayanan and Kasper Meisner Nielsen, Oxford Business Law Blog, 23 April]

First posted 2020-04-23 14:29:01