Directors' Personal Liability for Corporate Fault

The corporation's ability to avoid the costs of risks that materialize
as a result of its pursuit of profits is a departure from the market model. It
can easily be seen as an evasion of the obligations that go with being the
un-coercing, freely-acting and choosing 'invisible hand.' Dramatic corporate
collapses and major human and economic disasters due to bad corporate conduct
have strengthened the commonsense view that, if the corporate directors and
officers have made the deliberate act their own in some way, they may be held
responsible on the same basis that liberal law holds all individuals
responsible for their intended actions in the non-corporate settings.

Accordingly, recent decades have seen an increasing number of statutory
interventions worldwide that impose direct responsibilities on directors and
other corporate officers in respect of a wide range of regulatory regimes:
environmental regulation, occupational health and safety and other employment
standards, human rights statutes, transportation regimes, consumer and
competition laws, protections for creditors and workers against insolvent
trading, and the like. Legitimacy crises have pushed legislators to enlarge
the number of responsibilities, to increase the amounts of the fines that may
be levied and to make it clear that, in some cases, prison sentences will be
imposed.

This collection of essays describes and analyzes the legal regimes governing
directors' liability for corporate fault and default across eleven important
trading jurisdictions. It asks:

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Are the reform provisions, especially director duties of 'due diligence,'
sharply enough aimed to attain the goal of corporate accountability?

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Will it be easy or difficult for defendants to establish that due diligence
was exercised?

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Is it possible that more reliance on self-policing may lead to less
documenting and reporting of wrongs and dangers?

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What impact may schemes of greater self-monitoring have on State regulation?

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In what ways might corporations react to these demands that they become
guardians of the public weal?

The authors - each an authority in his or her respective jurisdiction -
recognize that the reforms are a reaction to the political problems created by
the ill fit of the corporation with the economic and political value systems
that we purport to hold dear. As they survey the ways that vibrant economies
can frame laws to influence the conduct of directors and companies, they
invite further exploration into the political, economic, practical, and
evolutionary factors that may explain the convergence and divergence of both
statute law and judicial doctrines and the desirability or inevitability of
this deeply significant trend.