Duties, board of directors, corporation, organization, business, traditional fiduciary duties, duty of cares
The corporation according to how we understand it today, came into existence in the 19th century because entrepreneur needed a device to raise capital from a large number of investors. According to the legal dictionary: "the corporation is an organization formed with state governmental approval to act as an artificial person to carry on business (or other activities), which can sue or be sued, and (unless it is non-profit) can issue shares of stock to raise funds with which to start a business or increase its capital".
[...] Harvard Law school corporate governance and financial regulation 2012. [...]
[...] Black[2] consists on a simple concept that-is-to say the decision makers within the company should act in the interest of the company, and not in their own interests. They must avoid to engaged in transactions that involve a conflict of interests. The duty of loyalty prevents from director's decisions motivate by personal gain. The fiduciary duty is a limit to the board of director's independence. It means that boards of directors are independent concerning the corporation's decisions but under the duty of loyalty they must act in good faith. [...]
[...] The rule is applicable in general to the purchase or sale of any security. Thus it prohibits for instance, material omissions, the use of non-public information by someone who has a special relationship with for instance a member of the board of directors, false or misleading statements oral or written, by the use of any means or instrumentality of interstate commerce, or e-mails, or of any facility of any national securities exchange. The only requirement under common law is to prove a fraud. [...]
[...] The principal fiduciary duties of board of directors, Stanford law school, during the presentation a third Asian round table on corporate governance, Singapore 4th of April 2001. Corporate law and the American law institute, corporate governance project, Kenneth E Scott The business judgment rule of 1995, from Dennis Block, Nancy E. Barton and Stephen A. Radin. Understanding corporate law, fourth edition, LexisNexis, Arthur R. Pinto, Douglas M. Branson. http://www.hbs.edu/faculty/Pages/item.aspx?num=32526 (Harvard business school website). Harvard 2009, John M. Olin center for law, economics, and business loyalty's core demand: The defining role of good faith in corporation law, Leo E. [...]
[...] The article of corporation generally provides for either unanimous written consent of the directors to act without a meeting or not. The court keeps a certain control on the board by requiring a meeting with all the members of the board considering that individual directors have no authority. So in theory, only the board acting as a group can act for the corporation. A director cannot act individual. There is a meaningful example of informal agreement through the case Baldwin v. [...]
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