Freeriderproblem doesdoinsuranceundermineadutyto

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Unformatted text preview: ons: Is there a fiduciary duty? . . . Identifying v. proving a breach… Extension in 2010 Do lawyers exploit investors in class action suits? Free Rider problem? Does D + O insurance undermine a duty to shareholders? Does fiduciary liability insurance? How should directors ‘discretion’ in carrying out their duties be defined? (Narrow ­ Broad?) “Business Judgment Rule” Copyright 2013 Copyright 2013 Questions Con’t: How should we view wasting corporate assets? The corp. jet parking lot at Augusta P. Grace ­ 24h nurse Fannie Mae Is the danger “Limiting director discretion” or “not limiting it” ­ in a fast and competitive market place? – Role of courts (legal system) ­ theft, asset diversion, dilution of shareholders rights, but ­ unlikely to challenge ‘discretion’ of directors Copyright 2013 Copyright 2013 Board of Directors & Diverse Ownership Are their only options to support the Are their only options to support the CEO ­or­ replace the CEO? Consider: Large shareholders have an interest in profit maximization and sufficient control to get respect for this interest – Michael Price & C...
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