Corporate Accountability & Shareholder Rights

The C-Suite and Board of Directors are accountable to the corporation and its shareholders, owing each a duty of due care and a duty of loyalty. Fraud, corruption, violations of human and civil rights, self-dealing and improprieties–these may all give rise to a breach of duty. And shareholders have the right to hold the C-Suite and the Board accountable.

Derivative litigation action, where a shareholder brings a lawsuit on behalf of the corporation, is one method of corporate accountability. Derivative actions can affect changes in corporate policies and procedures, raise compliance and governance standards, and even obtain monetary recovery for the corporation.

Shareholders also have the right to examine the books and records of a corporation. Inspecting books and records can provide shareholders with information about mismanagement or wrongdoing, or even the suitability of directors. Examining books and records can also assist shareholders in determining the strength and quality of potential derivative actions.