Finding Internal Limits on Fiduciary Loyalty

Corporate law – and fiduciary law in general – has struggled with how to handle loyalty duties that are harmful to society.  For example, a director’s act of loyalty to shareholders that harms the environment, or a director’s effort to benefit her corporation by breaking the law.  Not all of these cases are easily resolved by refinements to the law.  In some cases, though, the courts have indicated that the conduct at issue is not merely unacceptable, but also inconsistent with the fiduciary’s own obligation to be loyal.  A notable instance is when directors intentionally violate the law to benefit … Read more