Corporate Governance–A Moving Target

This Essay elaborates on Professor Conard’s sensible suggestion with the hope that others will take it to heart. First, the Essay discusses the unique governance problems raised by what I call quasipublicly traded corporations. These smaller corporations, whose shares are not actively traded, have been largely neglected in most discussions of corporate governance. The neglect is ironic since most state corporation statutes were originally designed with the quasipublicly traded corporation in mind. Second, the Essay turns to a problem of corporate governance common to all corporations – the proper role of directors – and shows that appropriate standards may vary with the type of corporation at issue. It concludes that the director’s role is best defined in terms of flexible common-law concepts of :fiduciary duties. Together, the discussions of quasi-publicly traded corporations and :fiduciary duties of directors show that corporate governance is not a static concept; it is rather a moving target, shifting with the regulatory problems of different sized corporations.