Chapter

Managerial Efficiency

J. E. Parkinson

in Corporate Power and Responsibility

Published in print April 1995 | ISBN: 9780198259893
Published online March 2012 | e-ISBN: 9780191682018 | DOI: http://dx.doi.org/10.1093/acprof:oso/9780198259893.003.0020

Series: Clarendon Paperbacks

Managerial Efficiency

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This chapter assesses the legal response to shirking and managerial incompetence, the other problems that have been assumed to be exacerbated by the separation of ownership and control, by way of the duty to exercise diligence, care, and skill. The chapter concentrates on the influence of weak owner control on management efficiency. It also surveys the law of negligence as it applies to directors, and addresses whether the role of the courts as external monitors of management efficiency could usefully be increased. The claim that the separation of ownership and control does not lead to serious inefficiency is discussed. The view of some market theorists that the operation of market forces renders liability rules in this area superfluous is explained as well.

Keywords: managerial efficiency; ownership; owner control; law of negligence

Chapter.  22599 words. 

Subjects: Company and Commercial Law

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