Competing Visions of the Corporation and Fiduciary Obligation: Some Comparative Law Perspectives

Corporate law has periodically been declared moribund or intellectually exhausted, most notably in Bayless Manning’s influential assessment of mid-twentieth-century scholarship. Contrary to such predictions, however, the field experienced a resurgence from the 1980s onward, driven by the emergence of new theoretical frameworks, including agency theory, communitarianism, team production theory, and convergence debates. Among these, agency theory, as advanced via the law and economics movement, achieved dominance. By recasting the corporation as a nexus of contracts, this contractarian movement narrowed the focus of corporate law to the mitigation of agency costs between managers and shareholders. Contractarianism, while analytically powerful, contributed to the marginalization of fiduciary law and attenuated the moral and social dimensions traditionally associated with corporate governance.

This article revisits these developments through the lens of Professor Deborah DeMott’s scholarship, which offers a sustained critique of law and economics orthodoxy. DeMott reconceptualizes fiduciary obligation as a historically grounded, equitable doctrine that operates not merely as a set of contractual duties but as a flexible, situation-specific mechanism for ensuring accountability and regulating power. Her work highlights the enduring normative and societal functions of fiduciary law and challenges the reductionist tendencies of contractarianism. Building on this insight, the article situates DeMott’s analysis within a comparative framework, contrasting Delaware corporate law with contemporary developments in the United Kingdom and Australia. In doing so, the article highlights alternative trajectories in corporate theory and fiduciary obligation that preserve a broader conception of the corporation’s social role.