Law Journal to host Professor Lisa Fairfax for "Fiduciary Duties - The Duty of Oversight"
Lisa Fairfax, the Leroy Sorenson Merrifield Research Professor of Law and Director of Conference Programs at George Washington Law will present "Managing Expectations: Does the Directors’ Duty to Monitor Promise More than it Can Deliver?" on Monday, Oct. 22 at 5 p.m.
The recent financial crisis and the corporate governance crisis exemplified by Enron and Worldcom have placed renewed emphasis on directors’ monitoring duty—directors’ duty to actively monitor the corporation and its employees to better detect and prevent wrongdoing. Commentators have suggested that directors’ failure to actively oversee the corporation and its employees may have contributed to, if not been a leading cause of, the financial crisis and corporate governance failures that have led to large scale losses to the corporation and the broader society. As a result, significant focus has been placed on enhancing directors’ monitoring duty in order to prevent such crisis and improve corporate governance. This article pinpoints the legal and practical limitations associated with making the directors’ monitoring duty more robust, and then addresses whether those limitations undermine the extent to which we can realistically expect the monitoring duty to have any appreciable impact on directors’ ability to better detect and prevent corporate wrongdoing, or otherwise improve corporate governance.