On the Export of U.S.-Style Corporate Fiduciary Duties to Other Cultures: Can a Transplant Take?

Abstract

This essay explores the feasibility of exporting U.S.-style corporate fiduciary duty rules to other nations. It suggests that fiduciary duty rules are best understood as open-ended standards of behavior that exhort corporate officers, directors, and controlling shareholders to focus on the firm's interests rather than their own, in circumstances where a failure to do this often would be difficult to punish. Put differently, fiduciary rules ask corporate insiders to show altruistic concern for the firm and its shareholders. Extensive empirical evidence demonstrates that altruistic behavior is in fact common, predictable, and reliable among U.S. subjects. However, a recent study also reports significant cross-cultural differences in altruistic behavior. The essay explores some possible sources of such cross-cultural differences, and what each implies about the challenges to be faced in transplanting fiduciary duty rules to other societies. In the process, it offers insight into the phenomenon often described as culture.