Promoting enhanced enforcement of directors' fiduciary obligations: the promise of public law sanctions

Mayanja, James (2007) Promoting enhanced enforcement of directors' fiduciary obligations: the promise of public law sanctions. Australian Journal of Corporate Law, 20 (2). pp. 157-182. ISSN 1037-4124

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Abstract

The substantive law which regulates the exercise of directors' powers is not self implementing. Action must be taken to enforce its observance. The legal system must therefore provide a reliable mechanism for enforcing the law which seeks to protect the interests of companies and, vicariously, the investing community. Unless that is done, the applicable rules are bound to deteriorate into voluntary obligations which the controllers of companies may or may not observe according to their whims. This article argues that dual (public and private) is required in order to achieve optimum enforcement of the law governing directors' fiduciary duties. Further, it advocates enhanced use of public (criminal) law sanctions as a means of promoting greater deterrence of wrongful director conduct. By reason of their stigmatic effects, these sanctions have great potential to deter undesirable conduct. Some of the impediments to the effective use of public law sanctions in this area are examined. Finally, the article explores ways in which the law could be reformed to overcome these obstacles.


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Item Type: Article (Commonwealth Reporting Category C)
Refereed: Yes
Item Status: Live Archive
Additional Information: Deposited with permission of publisher.
Depositing User: Dr James Mayanja
Faculty / Department / School: Historic - Faculty of Business - Department of Law
Date Deposited: 28 Mar 2008 04:51
Last Modified: 04 Oct 2013 04:35
Uncontrolled Keywords: directors' fiduciary obligations; private enforcement; public enforcement; public (criminal) law sanctions
Fields of Research (FOR2008): 18 Law and Legal Studies > 1801 Law > 180109 Corporations and Associations Law
18 Law and Legal Studies > 1801 Law > 180110 Criminal Law and Procedure
15 Commerce, Management, Tourism and Services > 1502 Banking, Finance and Investment > 150205 Investment and Risk Management
Socio-Economic Objective (SEO2008): B Economic Development > 91 Economic Framework > 9104 Management and Productivity > 910402 Management
URI: http://eprints.usq.edu.au/id/eprint/2247

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