Shareholder supremacy in law: Truth or Fiction?


A commonly held view in business studies is that the management of a company are legally obligated to only serve the interests of the shareholders. This viewpoint seems to be the most coherently developed in the fields relating to corporate governance which also could be an explanation for its popularity. The aim of the article is to show that legal regulations about directors’ duties are more permissible when it comes to business decisions. The article mainly focuses on available scientific literature and the provisions of relevant statutes and rulings. The main finding of the article is that while certain jurisdictions explicitly state the requirement for giving special attention to shareholders, however, legally the management has the freedom to exercise business judgement in the interest of company, especially in jurisdictions where the shareholders are not given special treatment in the provisions on directors’ duties.

X. ÉVF. 2022. Különszám 48-50

DOI: 10.24387/CI.2022.SI.9


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