Devolution of corporate managerial powers: A critical analysis

Abstract

Generally, corporate managerial powers which, among others, entail powers to manage the company as a going concern, to exercise good faith and to act within powers are devolved to the corporate management. The corporate board may be negatively or positively active in the exercise of its powers. For third parties, the law made adequate protection for third parties which shield them from harm of agency problems. But the same cannot be said of the company. In certain cases where the board is positively active, this may unwittingly result in Longe Effect. Where the company suffers due to managerial slack it is the minority that bears the brunt. The enlightened shareholder value precept, albeit still evolving, can address these risks