The following article will address the issue of the extent to which minority shareholders should be recognized to have a legal right which reflects the responsibilities of the management to the shareholders as a group. It will then address the issue of whether the imposition of "fiduciary duties" as traditionally defined furthers the goal of protecting minority shareholders. It concludes that while minority shareholders need more protection than the corporate structure (absent the imposition of extrinsic duties) can give them, the imposition of "fiduciary duties" is not a proper response. In order to explore these issues, the article will analyze the behavior of the controlling shareholder(s) in a close corporation; it will then analyze the behavior which the minority shareholder(s) would try to impose upon the controlling corporation; these behaviors will then be compared in terms of economic efficiency; finally the economic efficiency of allowing minority shareholders an enforceable right to change corporate policy will be discussed.
Mark Blair Barta,
Is the Imposition of Fiduciary Responsibilities Running from Managers, Directors, and Majority Shareholders to Minority Shareholders Economically Efficient,
38 Clev. St. L. Rev.
available at http://engagedscholarship.csuohio.edu/clevstlrev/vol38/iss4/5