Jove
Visualize
Contact Us
JoVE
x logofacebook logolinkedin logoyoutube logo
ABOUT JoVE
OverviewLeadershipBlogJoVE Help Center
AUTHORS
Publishing ProcessEditorial BoardScope & PoliciesPeer ReviewFAQSubmit
LIBRARIANS
TestimonialsSubscriptionsAccessResourcesLibrary Advisory BoardFAQ
RESEARCH
JoVE JournalMethods CollectionsJoVE Encyclopedia of ExperimentsArchive
EDUCATION
JoVE CoreJoVE BusinessJoVE Science EducationJoVE Lab ManualFaculty Resource CenterFaculty Site
Terms & Conditions of Use
Privacy Policy
Policies

Related Experiment Videos

New legal standards for trustee performance.

S M Blaes

    Health Progress (Saint Louis, Mo.)
    |December 11, 1986
    PubMed
    Summary

    Corporate directors must thoroughly research decisions to avoid personal liability. Recent court rulings emphasize the need for informed judgment, not just good faith, when making major corporate decisions.

    Related Concept Videos

    You might also read

    Related Articles

    Articles linked to this work by shared authors, journal, and citation graph.

    Sort by
    Same author

    A full-time ministry.

    Health progress (Saint Louis, Mo.)·1991
    Same author

    Effective physician credentialing. Properly monitoring medical staffs can protect hospitals from liability.

    Health progress (Saint Louis, Mo.)·1990
    Same author

    The guardian and the discharge planner. An attorney's-eye-view.

    Discharge planning update·1989
    Same author

    Patient education protects from malpractice claims.

    Patient education newsletter·1984
    Same author

    How to stay out of court: tips to trustees from a lawyer.

    Trustee : the journal for hospital governing boards·1982
    Same author

    Hospital trusteeship: corporate and personal liability.

    Hospital progress·1982

    Area of Science:

    • Corporate Governance
    • Business Law
    • Fiduciary Duty

    Background:

    • Historically, trustees acting in good faith were shielded from personal liability for errors in judgment.
    • Recent landmark cases (Smith v. Van Gorkom, Hanson Trust PLC v. MLSCM Acquisition, Inc.) have shifted this precedent.
    • These rulings impose personal liability on directors for hasty, ill-informed decisions concerning corporate ownership.

    Purpose of the Study:

    • To analyze the implications of recent court rulings on director liability.
    • To outline best practices for corporate boards in decision-making processes.
    • To address potential tensions between boards and management regarding due diligence.

    Main Methods:

    • Analysis of recent legal precedents (Smith v. Van Gorkom, Hanson Trust PLC v. MLSCM Acquisition, Inc.).
    • Review of legal standards for director fiduciary duty and business judgment.
    • Examination of procedural requirements for informed corporate decision-making.

    Main Results:

    • Directors can be held personally liable for failing to exercise informed business judgment, even if acting in "good faith."
    • Demonstrating a fair transaction requires consulting management, legal counsel, and independent authorities.
    • Adequate time and access to pertinent documents are crucial for board decision-making.

    Conclusions:

    • Corporate boards must rigorously probe and question before approving significant actions to avoid liability.
    • Establishing clear documentation of due diligence in meeting minutes is essential.
    • Balancing fiduciary obligations with management collaboration is key to sound corporate governance.

    Related Experiment Videos