An Australian Perspective on the Potential Utility of the Duty of Care and Diligence as a Means to Realise Stakeholder Ideals
Location:
Moot Court Room,
Old College
Date/time
Mon 22 April 2024
17:30 - 18:30
About this event
The topic of directors’ duties remains popular among corporate law scholars and has given rise to interesting (and endless) academic debate about what directors are to do in order to comply with their obligations; the beneficiary of these obligations; enforcement of obligations; and so forth. A familiar and controversial aspect of these discussions remains the shareholder v stakeholder debate, which developed on the basis of different interpretations of the phrase ‘interests of the company’. This paper takes a sympathetic view in respect of the position of directors in so far as proponents of the stakeholder view of the corporation would suggest that directors are required to determine the ‘interests of the company’ with reference to the interests of an open-ended group of stakeholders, often with conflicting ‘interests’. It argues against an expanded notion of the ‘interests of the company’ in so far as the ‘best interests’ duty is concerned, and does so on the basis of historical, conceptual, and practical reasons. Instead, it argues that it is time to revisit the past in order to reconsider the origins and purpose of directors’ duties, with a view to providing a fresh perspective on the content and application of these duties in modern times. This is particularly pertinent where corporate conduct is increasingly scrutinised on the basis of the impact of corporate activity on society. Ultimately, the paper aligns itself with the views of those academics who view the ‘best interests’ duty as an inappropriate vehicle to achieve the ideals underpinning the stakeholder model. As an alternative, it supports the view that there is merit in exploring the extent to which the duty of care and diligence could better achieve some of these objectives.
About the speaker
Sulette Lombard commenced her career in academia in 1997 and over the last twenty plus years had the opportunity to teach into an array of commercial law subjects, primarily corporate law and insolvency law, at an undergraduate and post-graduate level, both in Australia and South Africa. The effectiveness of Sulette's student-centred approach to teaching was recognised by a national teaching award (Australian Award for University Teaching: Citation for Outstanding Contributions to Student Learning) in 2018.