A Duty to Diversify
Fiduciary duties reflect the central role of leaders in corporate governance. Those with the most responsibility benefit the most from corporate success, but also bear commensurate fiduciary responsibilities. Equality, diversity, and inclusion may seem an odd fit among other fiduciary duties. However, fiduciary duties are where governance imposes the burden of “doing the right thing.” Fiduciary duties involve normatively good behavior that proves essential to ensuring responsible decision-making and achieving positive outcomes for firms.
Corporate law allows, encourages and perhaps, today, even mandates, corporate leaders to do the right thing. Not only does it seem appropriate to ask corporate leaders, such as institutional investors, to carry this fiduciary duty, but imposing this duty on them may prove far more effective than other efforts. As a new generation of leaders rise to lead, the resulting changes may prove revolutionary, both for firms and investors.
corporate governance, diversity, fiduciary duty, Delaware
Vanderbilt Law Review (forthcoming)
Alon-Beck, Anat; Rosenblum, Darren; and Agmon-Gonnen, Michal, "A Duty to Diversify" (2021). Faculty Publications. 2127.