The Role of the Corporate Director: More than Just 'Making It' in the Corporate World
| Author | Joseph Groia and Kellie Seaman |
| Pages | 449-469 |
Joseph
Groia
and
Kellie Seaman
Corporation,
n. An
ingenious
device
for
obtaining individual
profit
without
individual
responsibility.
—
Ambrose
Bierce,
The
Devil's Dictionary
A.
INTRODUCTION
Ambrose Bierce's hundred-year-old derogatory comment about corpo-
rate
accountability,
or
rather
the
lack
thereof,
may
seem
somewhat
prophetic with
the
benefit
of all but the
most recent hindsight. Yet,
Bierce,
a
self-proclaimed cynic
and
popular columnist
of the
late nine-
teenth century, was,
in
fact,
sharing
a
widely held sentiment
of the
time.
Rooted
in a
bloody British
experience,1
nineteenth-century anti-corpo-
rate sentiment
was
heightened considerably
by the
U.S. Supreme
Court's controversial decision
to
grant corporations
the
same rights
as
Joseph Groia
is a
principal
at
Groia
&
Company
PC.
Kellie Seaman
is an
asso-
ciate
at
Groia
&
Company
PC.
For
an
excellent review
of the
introduction
of the
corporate
entity
to
colonial
America
see Ted
Nace's
Gangs
of
New
York:
The
Rise
of
Corporate
Power
and the
Disabling
of
Democracy
(New
York:
Berrett-Koehler
Publishers
Inc., 2003) avail-
able
online
at
449
1
The
Role
of the
Corporate
Director:
More than Just "Making
It" in the
Corporate World
450
JOSEPH
GROIA
AND
KELLIE
SEAMAN
living
persons under
the
Fourteenth Amendment
to the
Constitution.2
This,
in
turn,
sparked grave
concerns
about
the
transformation
of the
traditional
jointly owned
and
managed business, most common
in
North America,
to the
manager-operated
but
shareholder-owned struc-
ture
of the
corporation; and,
in
particular, daunting concerns about
who
would
be
held accountable
for the
actions
of the
latter.
As we
noted
in
an
earlier paper
for
McGill
University's
Meredith Memorial Lectures,
the
Lord Chancellor once asked "did
you
ever expect
a
corporation
to
have
a
conscience,
when
it has no
soul
to be
damned,
and no
body
to be
kicked?"3
The
comments
of the
Lord Chancellor ring even more loudly
today.
As it
turned out, these concerns foreshadowed many
of the
major
corporate
legal issues
for the
better part
of the
next century;
the
corpo-
ration thrived
in its
unique
position
as a
legal
"person"
while
the
per-
sons
who
acted
as the
directing mind
and
will
of the
corporation
all too
often
enjoyed unparalleled freedom
from
many
of the
personal respon-
sibilities
and
consequences normally associated with commercial activ-
ity.
In the
interim,
the
ties that bound corporations
and
government
together
(so
feared
by
America's
founding fathers)
strengthened,
ren-
dering
the
corporation
a
most
formidable
force
in the
North American
marketplace.
It
is
within this context that
the
modern-day evolving role
of
direc-
tors
and
officers,
both within
the
corporation
and in the
capital markets
at
large, must
be
considered.
Clearly,
many stakeholders play
a
role
in
defining
the
modern corporation
—
customers, shareholders, employ-
ees, creditors, management, auditors,
and
regulators, just
to
name
a
few.
Yet,
in the
fallout
from
Enron
and the
continued
falling
out of
Parmalat,
the
conduct
of
directors
has
received some
of the
most scathing criti-
cism.
As a
result,
it is
directors
who
have been burdened with
the
lion's
share
of
corporate governance reforms, intended
to
address both real
and
imagined shortcomings
in
corporate,
securities,
and
administrative
law.
2
Santa
Clara
County
v.
Southern
Pacific
Railroad
Company,
(1886).
The
Fourteenth Amendment provides
for
"Rights Guaranteed Privileges
and
Immunities
of
Citizenship,
Due
Process
and
Equal
Protection."
3 J.
Groia
& K.
Adams, "Searching
for a
Soul
to
Damn
and a
Body
to
Kick:
The
Liability
of
Corporate
Officers
and
Directors,"
Meredith
Memorial
Lectures
1990
(Cowansville,
QC: Les
Editions
Yvon
Blais
Inc., 1990)
at
127.
As
cited
by
J.C.
Coffee
Jr.,
"No
Soul
to
Damn,
No
Body
to
Kick:
An
Unscandalized Inquiry
into
the
Problem
of
Corporate Punishment" (1981)
79
Michigan
L.
Rev.
386 at
386.
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