Category Archives: Business Organisation

‘The moral hazard of limited liability’

“Moral hazard occurs when the ‘costs’ of a bad outcome of a (predictable) risk fall, in part or in whole, on someone other than those taking the risk, while at the same time benefiting from good outcomes. If the probabilities of that risk can be ascertained in advance, then, in principle, the risks can be […]

Nick Friedman, ‘Corporate Liability Design for Human Rights Abuses: Individual and Entity Liability for Due Diligence’

ABSTRACT In this article, I critically review the economic theory of corporate liability design, focusing on the allocation of liability between a corporation and its individual human agents. I apply this theory to transnational commercial contexts where human rights abuses occur and assess the likely efficacy of some putative liability regimes, including regimes requiring corporations […]

Hans Tjio, ‘Adjudicating Intermediary-Related Losses’

ABSTRACT Three-party situations are problematic due to the agency, information and administrative costs involved. This includes the substitution of parties in relationships characterized as choses in action, which is why we see them as property transfers even if that is not fully accurate. We also create separate personality to help compress the number of parties […]

Gerner-Beuerle, Paech and Schuster, ‘Study on Directors’ Duties and Liability in Europe’

ABSTRACT The liability regime of executive and non-executive directors in companies constitutes a necessary corollary to control issues within a company. It is based on the determination of specific duties, it establishes the limits of management behaviour and it provides stakeholders and third parties dealing with the company with legislative protection against management misconduct. In […]

Damianus Abun, ‘Moral Standards and Corporation’s Moral Responsibility’

ABSTRACT It has been an old argument that Business Corporation is a legal entity, a separate entity, and separate from the owner. It has a blanket to protect itself from being sued. The corporate veil has been used as a shield to protect itself from prosecution. With such protection, how can it be morally responsible […]

Lin and Lin, ‘Directors’ Duty of Care in China: Empirical and Comparative Perspective’

ABSTRACT The adoption of director’s duty of care in the 2005 revision of the PRC Company Law made significant progress in holding directors accountable for their wrongdoings. However, certain defects still exist, most importantly the lack of a specific standard for the duty of care in the legislation. Therefore, this article adopts an empirical and […]

Rosemary Teele Langford, ‘Statutory Duties and Ratification: Untangling the Maze’

ABSTRACT This article probes the apparent incoherence created by the fact that breach of the statutory directors’ duties in the Corporations Act 2001 (Cth) cannot be ratified or authorised by shareholders. This was recently affirmed by the Full Federal Court in Cassimatis v Australian Securities and Investments Commission (the Storm Financial case). This contrasts with […]

Murray and Langford, ‘The Best Interests Duty and Corporate Charities – The Pursuit of Purpose’

ABSTRACT Most Australian charities are incorporated. Yet most directors, legal advisers and commentators are hard pressed to articulate a fairly fundamental obligation of charity directors: to act in good faith in the best interests of their corporation. At a time when shareholder primacy is being increasingly questioned for for-profit corporations and consideration of stakeholders or […]

Rudresh Mandal, ‘Directors’ duties, CSR and the tragedy of the commons in India: Mutual coercion mutually agreed upon’

ABSTRACT This article argues that humanity is locked into a system culminating in the tragedy of the commons (ToC), and swift action is required to course-correct. Undeniably, companies are the single-largest users of natural resources. To that extent, this article puts forward two interrelated proposals on refining directors’ duties under Section 166 of the Indian […]

Gökçe Kurtulan Güner, ‘Rethinking the Need for Commercial Trusts in Civil Law Jurisdictions’

ABSTRACT In this article, the need for the adoption of trusts into civilian jurisdictions has been analysed by placing a special focus on commercial trusts. It has been argued that, the trust may offer an added value for these legal systems as it is more advantageous in terms of asset management, investment and financing purposes. […]