The Fiduciary Duty of Corporate Directors to Protect the Environment for Future Generations
Abstract:The 'business judgement rule' requires corporate directors only to act with honesty and reasonable care in the interest of shareholders. A stronger 'fiduciary' duty is required where one party requires protection from another. This paper argues that where corporations take risks with the environment, directors are fiduciaries. Stakeholders are in that case the general public, future generations and other species, which have not voluntarily accepted risk and cannot limit liability. Recognition of fiduciary duty in such cases is consistent with recent trends in the law of equity. It would require all economic activities to move from open to closed (sustainable) systems.
Document Type: Research Article
Publication date: August 1, 1992
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- Environmental Values is an international peer-reviewed journal that brings together contributions from philosophy, economics, politics, sociology, geography, anthropology, ecology and other disciplines, which relate to the present and future environment of human beings and other species. In doing so we aim to clarify the relationship between practical policy issues and more fundamental underlying principles or assumptions.
Environmental Values has an impact factor (2015) of 1.311.
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