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This article explores the ways in which history can be useful in teaching directors’ duties, specifically the duty to monitor. I argue that the Delaware courts’ changing views of directors’ duties reflect a broader shift—from a corporate law grounded in business practice to one anchored in, and ultimately trumped by, modern finance theory. As the article explores the influence of business practice in the mid-century years, law’s emphasis on structure and process in the 1970s and 1980s, and ultimately the triumph of finance over law in the 1990s, it also discusses how the rhetoric of care, business judgment, and good faith helped assure investors that they could trust their corporate managers while rendering the duty to monitor (and the duty of care more broadly) inconsequential.

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GWU Law School Public Law Research Paper No. 2018-22; GWU Legal Studies Research Paper No. 2018-22

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