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Washington and Lee Law Review - Volume 74:2


by Harwell Wells

At first glance, corporate waste makes no sense. The very definition of waste—a transaction so one-sided that no reasonable business person would enter into it, an act equivalent to gift or “spoliation”—suggests that it would never occur, for what corporation would ever enter into a transaction so absurd? Yet waste claims are regularly made against corporate managers. Respected judges have downplayed waste as a “vestige” and described it as “possibly non-existent,” the Loch Ness monster of corporate law; but waste survives. It is a remnant of ultra vires, a doctrine proclaimed largely dead for the last hundred years—but waste is not dead. It confounds our model of managerial responsibility; after decades in which corporate directors’ and officers’ duties have been focused into the fiduciary duties of care and loyalty, waste sits outside that framework, for historically waste isn’t a fiduciary duty at all. This Article, the first modern survey of the corporate waste doctrine, discusses the origin of corporate waste, documents and explains its survival, and tentatively foresees its demise.


by Andrew Johnston

Through a historical analysis of corporate law reforms in the United Kingdom (UK) during the twentieth and early twenty-first centuries, this paper traces the shrinking scope for corporations to take socially responsible decisions. It offers a detailed examination of the rationales and drivers of the reforms, and shows that, by focusing exclusively on the question of accountability of directors to shareholders, wider social concerns were “bracketed” after 1948, leading to a permanent state of “crisis,” which constantly threatens the legitimacy of the corporate law system. Following the Brexit vote, there are signs that the UK Government is willing to reconsider its historically narrow approach to corporate law by introducing some form of stakeholder representation. This paper concludes that such a change would be a more effective means of integrating social responsibility concerns into the corporate governance process than the current constrained voluntarist approach.