The Duty to Act in the Interest of the Company

Abstract

In many jurisdictions, directors of a limited liability company have a duty of loyalty and a duty of care. The duties are often understood as implying a duty to act in the interest of the company. Since the company is an artificial legal person, it is not fully clear how this duty should be understood. The meaning of the duty has accordingly been discussed extensively in recent decades, and the debate has intensified as a result of the increased focus on corporate sustainability.
This chapter provides an analysis and discussion of certain topics and trends relating to the duty to act in the interest of the company, with the ultimate aim of concluding to which extent it may contribute to good corporate governance.