Megan W. Shaner (University of Oklahoma College of Law) has posted Recalibrating Corporate Governance: Bifurcating Officers on SSRN. Here is the abstract:
Officers are arguably the most consequential actors in corporate management, yet they are the least theorized participant in the law. Scholars have posited several explanations for the lag in the development of officer doctrine. This article identifies an overlooked cause—the homogeneous lens through which corporate law views these actors. Employing a legal framework based on officer homogeneity, however, is detached from the realities of corporate governance structures and how the modern corporation functions. Recent case law and statutory amendments reveal a new phenomenon in corporate law—the bifurcation of officers into two classes. This article argues that the bifurcation of officers is a tacit rejection of the historical homogeneous framework and recognition of the more nuanced roles officers play in corporate governance.
This article makes several key contributions to the existing literature. First, it identifies the homogeneous lens that corporate law has historically applied to corporate officers and asserts that homogeneity has been a barrier to meaningful development in this area of the law. Second, this article documents the emerging bifurcation of officers into two “classes”—executive and non-executive officers—with different legal treatment depending on the class in which one falls. This article argues that corporate law should embrace officer bifurcation, thus aligning legal principals with market realities. Finally, this article discusses the normative and doctrinal implications of this shift in corporate doctrine. While bifurcation provides a stronger normative basis for imposing liability than previously proffered models of officer duties, this article highlights important linguistic and substantive inquiries that need to be resolved.
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