Compelling shareholder responsibility

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Chapter 6 in The Responsible Shareholder, 2021, pp 163-188 from Edward Elgar Publishing

Abstract: This chapter considers two ways in the law might seek to compel shareholders to behave responsibly. The first is by imposing a duty on shareholders. The chapter argues that this cannot be a fiduciary duty; instead, a statutory good faith duty, owed to the company, is proposed. The purpose of the duty is to compel shareholders to balance their self-interest against the wider corporate interest. The second legal change is to remove the shield of limited liability in situations where the company causes physical injury. This liability would be activated only when the company's resources are insufficient to meet the claim. Liability would be allocated pro rata according to the size of shareholding and could be avoided either if the shareholder can demonstrate that they have taken steps to try to prevent the harmful conduct, or they are ignorant, according to certain criteria, of conduct.

Keywords: Business and Management; Economics and Finance; Law - Academic; Law - Professional (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (1)

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