Chapter

Management Self-Dealing

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/9780198259893.003.0023

Series: Clarendon Paperbacks

Management Self-Dealing

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This chapter illustrates that the current governance structure, involving no independent element between management and the dispersed and largely passive body of shareholders, creates considerable difficulties for the effective regulation of self-dealing. It concentrates on the legal controls on self-dealing. It begins by looking at transactions with the company in which a director has an interest, and at directors' service contracts, which are a sub-category of self-interested transactions, but these raise special problems of their own. It then addresses the exploitation by managers of corporate opportunities. It has been suggested that for the proper management of directors' conflicts of interest there needs to be a body that is able to give consent in appropriate cases to self-interested transactions and to determine directors' terms of service, and also to enforce the fiduciary principle.

Keywords: management self-dealing; governance structure; shareholders; legal controls; company; directors; managers

Chapter.  21156 words. 

Subjects: Company and Commercial Law

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