CODIFIED DIRECTORS’ DUTY TO BALANCE INTERESTS: THE
BEGINNING OF THE FUTURE FOR CORPORATE LAW?


Nojeem Amodu
Postdoctoral Research Associate
School of Oriental and African Studies (SOAS)
University of London


ABSTRACT
The question underpinning whether directors can legitimately consider
and balance other constituents’ interests in their business judgments
remains open-ended. This article reviews the state of modern company
law and finds that the dominance claim or global convergence on the
maximisation of shareholder wealth is not only exaggerated but has
become untenable in light of: (i) unmissable stakeholder-oriented
company law reforms across jurisdictions around the world; (ii)
widespread endorsement of directors’ duty to balance all stakeholder
interests in their own rights within business communities and among
leading academic experts. The article predicts the future for corporate
law clearly codifying directors’ duty to balance all interests. It not only
proposes a workable framework enabling effective discharge of this
duty within the ambit of the good faith doctrine and business judgment
rule but also affords non-shareholder stakeholders a justiciable right to
challenge uninformed, interested or mala fide business decisions.