Fiduciary Duty Research Articles

A shift from contractarianism to ‘characterisation’: Assessing the ideal Australian approach for determining fiduciary duties in a commercial context

In the wake of excessive judicial reliance on a contractarian approach to the assessment of fiduciary duties in commercial contexts, both judicial and academic concern has been voiced as to whether such an approach is the most appropriate to ensure fair dealing. What's more, the emergence of novel commercial relationships facilitated by changing values in business and exponential leaps in the capabilities and use of technology warrant a reassessment of whether contractarianism is fit for the purpose of ushering in appropriate legal analysis so that such new developments can be appropriately facilitated. This article argues that contractarianism is not fit for that purpose and that the ‘characterisation’ of the relationship between parties is a superior and more equitable approach to determining the extent of fiduciary duties in commercial contexts.

Legal Construction that Strengthens Individual Legal Responsibility in Corporate Leadership Regarding Practices Social and Environmental Responsibility in Indonesia

<p><em>In the realm of corporate leadership, the integration of </em><em>Tanggung Jawab Sosial dan Lingkungan (TJSL) practices has gained increasing attention as organizations seek to align their operations with sustainable development goals. This paper delves into the legal constructs aimed at strengthening individual legal accountability within corporate leadership concerning TJSL practices. The study engages in a comprehensive analysis of the evolving legal landscape, highlighting mechanisms designed to foster responsible decision-making and governance within corporations. A focal point of the investigation is the examination of legal frameworks that establish a direct connection between individual executives and their fiduciary duties towards social and environmental considerations. The paper explores various jurisdictional approaches to holding corporate leaders accountable, ranging from fiduciary duties extensions to the incorporation of TJSL principles into directorial responsibilities. By scrutinizing case law, statutory provisions, and international standards, the research uncovers patterns in legal precedents that uphold the principle of individual accountability. Furthermore, the paper scrutinizes the challenges inherent in enforcing such legal constructs, especially in transnational contexts. It addresses issues of jurisdictional reach, cross-border liability, and the harmonization of diverse legal frameworks to ensure cohesive accountability standards. The study also assesses the role of corporate governance mechanisms, internal policies, and external incentives that interact with legal provisions to motivate proactive TJSL practices. </em><em>In conclusion, this paper sheds light on the transformative potential of legal mechanisms in fostering a culture of responsible corporate leadership aligned with social and environmental values. It emphasizes the synergy between legal mandates and ethical imperatives, ultimately contributing to the advancement of sustainable business practices within a global context.</em></p><p> </p>

The Principle of Fiduciary Duty in Single-Member Limited Liability Company

Limited Liability Company in Indonesia has a conceptual expansion since the Job Creation Law has enacted. There are two types of Limited Liability Company currently, capital partnership limited liability company and single-member limited liability company. One of the most significant changes to the concept of limited liability company is related to its organs. Single-member limited liability company consists of director who also serve as shareholder. The expansion concept raises questions regarding the application of fiduciary duty to single-member limited liability company. This research uses conceptual and statute approach. The conclusion from this research is that in single-member limited liability company, there is only director who also become shareholder, thus there is no supervisory function by the board of commissioner. Secondly, the director in single-member limited liability company still has the obligation to carry out the responsibilities with the principle of fiduciary duty.

Grin and bare it: the recent kerfuffle over bare trusts

Abstract Recent changes to the Canadian Income Tax Act have resulted in the concept of bare trusts coming under discussion. In this article, Joel Nitikman, K.C. explores the history, definition and details of the concept of a bare trust and concludes that a trustee may have significant powers and even numerous inherent fiduciary duties and yet still be a bare trustee.

Financial performance of mutual and pension funds focused on the natural resources sector

The natural resource sector plays a critical role in advancing sustainable development. However, fossil fuels, precious metals, and mineral extraction require large investments, which mutual and pension funds may assume when allowing fund managers to fulfil their fiduciary duties. This study examines the financial performance of conventional, natural resource, energy, and precious metal-related mutual and pension funds, considering the effects of the COVID-19 pandemic. We adopted a five-factor model with a sample of 42 natural resource funds, 45 energy funds, 45 precious metal funds, and 2172 conventional funds from January 2016 to December 2022. The results indicate that driven by fund managers’ reverse stock-picking skills, the precious metal fund category reaches the lowest mean risk-adjusted return in relation to the energy, natural resources, and conventional fund categories. Additionally, the COVID-19 global health crisis negatively affected the mean risk-adjusted returns on the energy, precious metals, and conventional funding categories. A similar effect is observed in the natural resource pension fund category, while its matching mutual fund category achieves similar financial performance during the non-crisis and crisis periods.

Should Antimicrobial Resistance Limit Access to an Organ Transplant?

Burkholderia cenocepacia (B cenocepacia) is a gram-negative bacteria associated with significant morbidity and mortality following lung transplantation. Most US transplant programs consider B cenocepacia colonization to be an absolute contraindication to transplantation. This article argues that, if clinicians have good clinical reasons to expect poor outcomes for patients with B cenocepacia, then offering transplantation anyway is an abrogation of clinicians' fiduciary duties. This article also discusses other fiduciary obligations transplant programs might have to patients with B cenocepacia, such as referring to another transplant center, considering novel treatment options, and investigating how the infection's virulence factors stratify that patient's risk for poor transplant outcomes.

Keeping them “Honest”: Breach of Fiduciary Duty and Liability for Dishonest Assistance

Keeping them “Honest”: Breach of Fiduciary Duty and Liability for Dishonest Assistance

Breach of Fiduciary Duty in Trade Secret Infringement Cases: Brief Analysis of the Criminal Judgment of Supreme Court (110) Tai-shang Tsu No. 2922

Breach of Fiduciary Duty in Trade Secret Infringement Cases: Brief Analysis of the Criminal Judgment of Supreme Court (110) Tai-shang Tsu No. 2922

A Reassessment of the Role of Good Faith in Personal Liability Before and After Stone v Ritter

The paper explores the role of good faith within the traditional theory of fiduciary duty in the lead-up of the Delaware Supreme Court’s Stone ex-rel. AmSouth Bancorporation v. Ritter decision. The enforcement of the director’s liability is discussed concerning the doctrinal controversies concerning inter alia, the reach of the exculpation statute passed after the Smith v Van Gorkon holding. The paper also analyzes the conditions that a Plaintiff must survive a motion to dismiss a claim of director liability; the appropriate standard of review for alleged duty of liability breaches, and the role of good faith within the overall triad of traditional fiduciary responsibilities. Over a decade after this landmark case was decided, there is value in reconsidering whether the Stone judgment lived up to the promise of the Caremark holding and its reformulation of good faith as a judicial device for evaluating director liability in contexts that not do easily fit with the traditional doctrines of duty of care and loyalty.

The dark side of AI in professional services

ABSTRACT The introduction and widespread adoption of Artificial Intelligence in the professions has the potential to deliver a number of critical public goods, such as widening access to justice and healthcare through AI-powered professional services. Yet, the deployment of AI in the professions does not come without challenges, exemplified by the concerns about explainability, privacy, and human agency. In this paper, we explore how these issues may give rise to dark sides of AI in professional services and illustrate how an uncoordinated process of adoption and deployment can threaten the scope of AI-powered services. In particular, we illustrate how the adoption and deployment of AI in services may undermine the fiduciary duty between clients and professionals that, so far, has safeguarded the relationship between them, creating a ‘market for lemons’ of professional services. We conclude with a reflection on plausible ways forward to facilitate and smooth the transition to AI-powered services.

Clinical Ethics Consultation for Patients Impacted by Incarceration: A Single Center Retrospective Review.

Health care professionals and patients impacted by incarceration face unique medical, legal, and ethical issues. The frequency and nature of ethics consultations for these patients are underexplored. This study aimed to characterize the primary ethical issue and contextual features of ethics consultations involving patients impacted by incarceration. We conducted a qualitative concept content analysis of ethics consultations involving patients impacted by incarceration and calculated descriptive statistics of demographics to compare these patients with the broader population of patients impacted by incarceration at a single institution from January 1, 2015, through June 30, 2022. We identified 37,184 patients impacted by incarceration (people currently or formerly incarcerated or whose surrogate decision-maker is incarcerated) at our institution. Most were White (70%) and non-Hispanic (88%); 51% were male, 49% female. Individuals impacted by incarceration comprised 3% (n = 38) of ethics consults. Most were White (58%), male (79%), and hospitalized (92%). The primary ethical issues were surrogate decision-making (34%) and fiduciary duties (beneficence/nonmaleficence/best interest; 16%). The primary contextual feature was intra-family communication challenges (37%). Incarceration status impacts access to decision-makers and the provision of medically necessary care. Ethics consultation for women and individuals in outpatient and emergency settings could be underutilized. More education about ethics consultation services and coordination with correctional officials is recommended.

Collaborative investor engagement with policymakers: changing the rules of the game?

Purpose Applying universal ownership theory and drawing on a multiplecase study design, this study aims to analyze what drives institutional investors to engage with government entities and what challenges they find in the process. Design/methodology/approach The authors relied on document analysis and conducted 12 semi-structured interviews with representatives from asset owners, asset managers, investor associations and academia. Findings The authors identify a trend where investors conduct policy engagement to fulfill their fiduciary duty, improve investment risk management and create an enabling environment for sustainable investments. As for engagement challenges, investors report the longer-term horizon, a perceived limited influence toward governments, the need for capacity building for investors and governments, as well as the difficulty in accessing government representatives. Originality/value This research contributes to filling a gap in the literature on this new form of investor activism, as a growing number of investors engage with sovereign entities on environmental, social and governance issues.

Account of profits—the link between profits earned and the breach of the fiduciary duty

Account of profits—the link between profits earned and the breach of the fiduciary duty

The Case for Fiduciary Duties in Public Law or when Public Law Duties are not Enough …

The Case for Fiduciary Duties in Public Law or when Public Law Duties are not Enough …

Cancelling fiduciary excuses

ABSTRACT In trust relationships, one person has a ‘beneficial interest’ in another’s performance. The former not only would but should benefit from the latter’s action, and the latter has a ‘fiduciary duty’ toward the former to so act. But where that act would otherwise be wrong, the first person’s beneficial interest would be providing a pro tanto reason for the second person to do something that is pro tanto wrong. That reason can – and should – be removed by the former renouncing their beneficial interest in the latter’s pro tanto wrongful action. Doing so would cancel the fiduciary’s excuse for wrongdoing on the beneficiary’s behalf.

COMPARISON OF THE IMPOSITION OF THE DOCTRINE OF PIERCING THE CORPORATE VEIL IN A LIMITED LIABILITY COMPANY BETWEEN THE BOARD OF DIRECTORS AND SHAREHOLDERS IN TERMS OF LAW NUMBER 40 OF 2007 CONCERNING LIMITED LIABILITY COMPANY

<em>The purpose of writing this journal is to determine the comparison of the imposition of the doctrine of piercing the corporate veil in a Limited Liability Company between the Board of Directors and shareholders, with a review of Law Number 40 of 2007 concerning Limited Liability Companies (UUPT). The Doctrine of Piercing the Corporate Veil is a doctrine that has long been present in the business world, especially attached to the legal entity of Limited Liability Companies in Indonesia. UUPT as the law governing Limited Liability Companies in Indonesia has set out the rules regarding the doctrine of piercing the corporate veil. The doctrine has historically been widely used in court decisions, the presence of the doctrine of piercing the corporate veil can penetrate the distinctive nature of a Limited Liability Company, namely limited liability. Departing from this inevitability, the author then formulates the problem in writing this journal, namely why there is a doctrine of piercing the corporate veil in a Limited Liability Company and how the comparison of the imposition of the doctrine of Piercing the Corporate Veil in a Limited Liability Company between the Board of Directors and shareholders is reviewed from the Company Law. The research method used is normative legal research, based on sources obtained through literature studies, in the form of primary, secondary, and tertiary legal materials related to the writing of this journal. This research shows that the presence of the doctrine of piercing the corporate veil in a Limited Liability Company is needed as a form of legal protection for the Limited Liability Company entity and its related parties, and there are differences in the imposition of the doctrine on the Board of Directors of the company and the company's shareholders. The difference in the imposition between the Board of Directors and the shareholders of the company is that, if the Board of Directors is required another article in relation to its good faith in running the company (fiduciary duty), while the shareholders of the company are expressly regulated in Article 3 of the Company Law.</em>

Institutional investor behaviour and the energy transition: A complexity framework for accelerating sustainable finance from UK investors

Despite sustainable investment flows having increased significantly over the past decade for transforming the current energy system, a large investment gap remains. This research explores the complex links between institutional investors' expectations on the speed of the energy transition and their sustainability-related investment behaviours. Through in-depth semi-structured interviews with institutional investors, we construct a complex system model using a causal mapping approach, illustrating complex relationships within the sustainable investment system. Our contribution involves the development of multi-layer cognitive maps for different types of institutional investors, followed by a composite causal map that dissects key investment behaviours and investor expectations. Results reveal interlinked concepts influencing investment behaviour and highlight feedback loops with potential amplifying effects on investor expectations and investment behaviour. Two critical feedback loops emerge: 1) the interplay between political and financial support for the energy transition and the associated cost, and 2) the intricate relationship between sustainability factors and asset valuation. Addressing these interconnected issues simultaneously and monitor negative feedback loops that may curtail sustainable finance flows are vital. The results reveal heterogeneities amongst institutional investors such as fiduciary duties, stranded assets, the importance of fossil fuels in the energy system. In sum, our insights provide a foundation for holistic energy policies and a reference system for evaluating policies aimed at accelerating green finance.

Proprietary claims by constructive trustees

Abstract If a fraudster obtains money by deceit, breach of trust or breach of fiduciary duty and seeks to launder that money by passing it through a chain of companies, the victim of the fraud will generally have an equitable proprietary claim to the proceeds in the hands of the ultimate recipient. But what of the companies involved in laundering the money? If they are put into liquidation, can they, by their liquidators, also make a proprietary claim to the proceeds? The answer to this question may be important, particularly in complex fraud litigation where the identity of the claimant can have far-reaching substantive, jurisdictional and tactical consequences.

Fulfilling fiduciary duties in the ai era: emerging risks and responsibilities in ai-assisted corporate financial oversight

This article examines emerging legal issues and theories of liability for directors involved in the management of AI financial instruments that are protected as trade secrets. The main question of the article is whether excessive delegation of functions or lack of transparency of AI algorithms can undermine the performance of fiduciary duties by directors. By reviewing case law in the context of strict oversight of past technological failures, the article proposes a renewed approach to the use of blockchain tools that will maintain efficiency benefits while ensuring necessary reporting and accountability. The study suggests that governance based on the principles of auditing AI performance and setting minimum standards for explainability can help strike a balance between driving innovation, addressing liability issues, and aligning with modern doctrines that hold boards accountable for key decision-making. new technologies. As algorithms become increasingly integrated into senior management decision-making processes, there is a need to further explore transparency mechanisms and monitoring processes that will support evolving fiduciary responsibilities in relation to evolving automation capabilities that impact shareholder interests.

The Management and the Advice of (Un)Explainable AI

Abstract 794The article addresses the issue that is widely discussed in Germany and other jurisdictions: can the management of a company use AI applications in its decision-making process without violating its fiduciary duties? The lack of transparency in conventional AI applications conflicts with the fiduciary duty to check the plausibility of external expert advice (in Germany known as the ISION principles). This tension can be partly resolved by using explainable AI (XAI). In this work, we review the basic principles of machine learning and XAI and discuss them in the legal context.