The Inefficacy of Private Enforcement of Directors' Duties
Company directors play an important role in society. Their activities have significant effects on the interests of their companies, shareholders and other stakeholders. Consequently, the law regards them as fiduciaries and imposes duties which set out behavioural expectations. The private enforcement regime is the primary mechanism adopted by many common law jurisdictions for securing compliance with directors’ duties. The crucial question is whether this regime is effective in securing enforcement of directors’ duties. This article addresses this question by examining the fundamental weaknesses of the private enforcement regime. In exploring these weaknesses, it focuses on the UK and Nigerian experience. It crucially argues that the private enforcement regime, due to its weaknesses, is unable to provide deterrence and compensatory benefits. It is therefore ineffective as an enforcement mechanism for breach of directors’ duties. This article therefore concludes that there is need for a complementary enforcement regime.
The file attached to this record is the author's final peer reviewed version. The Publisher's final version can be found by following the DOI link.
Citation : Akanmidu, O. (2019) The inefficacy of private enforcement of directors’ duties. Commonwealth Law Bulletin, 44 (4), pp. 668-698
ISSN : 0305-0718
Research Institute : Institute for Evidence-Based Law Reform (IELR)
Peer Reviewed : Yes
- Department of Law