Standards of Conduct and Standards of Review in Corporate Law: The Need for Closer Alignment

Abstract

This article examines the arguments in support of maintaining a divergence in duty of care law between the articulated negligence standard of conduct and the gross negligence standard of review, with particular emphasis on their application to the corporate fiduciary duty of care context. The author provides a detailed discussion of the arguments presented by Meir Dan-Cohen, while also focusing on articles by Richard Singer, David Phillips, and Melvin Eisenberg. After assessing the existing scholarship justifying divergent standards in the context of corporate law, the author concludes that a single, clearly articulated standard which both defines the scope of permissible conduct for each different context in which duty of care issues arise and guides judicial application of that standard is preferable to the current conflation of legal standards.

Keywords: corporate law, duty of care law, corporate fiduciary duty of care, standards of conduct, standards of review