CASE COMMENT: PEOPLES V. WISE -- CONFLATING DIRECTORS' DUTIES, OPPRESSION, AND STAKEHOLDER PROTECTION Skip over navigation
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Copyright (c) 2006 U.B.C. Law Review Society
The University of British Columbia Law Review

CASE COMMENT: PEOPLES V. WISE -- CONFLATING DIRECTORS' DUTIES, OPPRESSION, AND STAKEHOLDER PROTECTION

March, 2006

39 U.B.C. L. Rev. 209

Author

MOHAMED F. KHIMJI +

Excerpt

I. INTRODUCTION
 
The overriding objective of corporate governance is to align the interests of directors and officers with those of the corporation they serve through a system of legal mechanisms. Recent high-profile failures of large public corporations have prompted a reconsideration of the adequacy of this system. 1Any sensible discussion on the content or substance of these mechanisms cannot take place without first taking a position on the role of corporations. Only then is it possible to make a coherent assessment of what is to be expected of management and how this is best enforced. This is because the duties and obligations of directors and officers are defined and circumscribed by the manner in which the corporation is conceived. 2

The 1930s, in addition to the famous Berle and Means' thesis on the separation of ownership and control, 3 saw the "for whom are corporate managers trustees?" debate between Berle and Dodd. 4 Berle supported the narrower view of the corporation's responsibility as being profit maximization within the law. 5 The idea here, simplistically, is that this responsibility supports the notion that a corporation is to be managed for the benefit of the shareholders alone, who are its residual claimants. 6 This is the shareholder primacy model of corporate law and reflects the orthodox legal position. 7Dodd, drawing on the notion that a corporation is a legal person, adopts the wider interpretation to include social responsibilities. 8 The idea here is that corporations, like any person, ...
 
 
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