| As a result of the Supreme Court's broad definition for 'best interests of the corporation' in recent decisions, the author examines to whom managers ought to owe their fiduciary duties normatively and what role managerial discretion has in this debate. The author argues that the lack of clarity offered by the judiciary, in this area of corporate law, has led to the adoption of a wide discretion being afforded to managers. An examination of several rationales fails to justify this continued adoption of a broad discretion. The author argues that granting managers with wide discretionary powers is problematic because the interests of constituencies will not be adequately protected. At the very least, statutory reform is necessary to protect the most vulnerable stakeholders. The author recommends that the law be amended to require that managers, in performing their fiduciary duties, regard the interests of employees and shareholders. |
