Through the lens of Delaware law, this course will review the roles of the board of directors, senior officers, and stockholders in overseeing a corporation, monitoring management conduct, and promoting compliance. The course will consider the director’s duty of oversight, its origins, and how it has evolved. The course will examine whether senior officers owe a similar duty of oversight, or whether different duties apply. We will delve deeply into the derivative action, which is the primary enforcement mechanism through which stockholders can address management misconduct. As part of this effort, we will explore the various stages of the derivative action and consider its strengths and weaknesses.
As its source materials, the course will examine recent derivative lawsuits. The course also will consider hot-button topics, such as #MeToo issues as a business risk.
Course enrollment is limited to 50. Students are expected to possess a basic understanding of the law applicable to alternative entities and corporations. An introductory course in corporations is a prerequisite.
After taking this course, students will be able to answer the following questions:
- What standards apply to a board and senior officers when overseeing a corporation, monitoring for misconduct, and promoting compliance?
- What is the duty of oversight, how did it arise, and how has it evolved?
- What is the nature of a stockholder derivative action, the various stages of the proceeding, and its strengths and weaknesses?
- Are stockholder derivative actions an effective way of policing management misconduct? Is the Delaware corporate model particularly prone to management misconduct?
- Do alternative structures, such as B-corps or constituency-based models, offer promising alternatives?
- Can a corporation serve morally good ends?