After several public tragedies, corporate missteps, and catastrophes; politicians, certain investors, and other stakeholders have called for accountability in capitalism, proactive action to alleviate climate change, and performance of social obligations from corporations. The Business Roundtable and World Economic Forum have come out with proposals that signify a paradigm shift to the stakeholder approach to capitalism. Delaware, a haven for shareholder primacy, has permissive standards that allow a corporation to engage in any lawful business activity. However, concerns about fiduciary duties, especially the implied duties of good faith, legal compliance, and oversight, have created obligations for directors to engage in oversight and accountability mechanisms at the board level. These mechanisms are promising for stakeholders; by enhancing compliance and awareness about federal regulation, corporations can better equip directors to aid corporate stakeholders. This form of consideration of the stakeholder is consistent with the duty of care and the duty of loyalty, especially where they overlap with “mission critical” operations. This comment argues that corporate managers’ use of enhanced oversight of stakeholder and mission critical functions would be beneficial for both the stockholder and the non-stockholder stakeholder alike.
Pathak, Krishna P., "Mission Critical: How Fiduciary Duties of Oversight Can Aid Corporations in Managing Stakeholder Interests" (2020). Upper Level Writing Requirement Research Papers. 46.