Browsing by Author "Bird, Robert C."

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    Operational Risk and the New Caremark Liability for Boards of Directors
    (Boston University, 2023) Bird, Robert C.; Manning Magid, Julie; Kelley School of Business - Indianapolis
    This paper identifies a new and previously unidentified trend that is changing corporate governance: board liability for misconduct based on operational risk. Operational risk is serious business. When boards slumber, hundreds of people die in airline accidents, pipelines explode causing massive environmental damage, and mines collapse leaving families with grief unimaginable. These and other corporate disasters were entirely preventable, and board members were asleep at the wheel while the conditions were set for disaster. This manuscript argues that courts are only now starting to fully recognize the peril of operational risk as a source of liability for boards of directors. Operational misconduct should take center stage alongside financial mismanagement as a critical source of director liability. After closely reviewing the key cases, this manuscript shows how operational risk heralds a fundamental shift in the way boards respond to monitoring the firm. This manuscript also identifies how subtle changes in judicial doctrine is changing the way boards manage operational risk, avoid liability, and protect the lives of stakeholders of the company and society at large.
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    Toward a Systems Architecture in Corporate Governance
    (2021) Bird, Robert C.; Magid, Julie M.; Kelley School of Business - Indianapolis
    A new and powerful systems architecture is driving corporate governance. This architecture will improve board of directors’ decision making, strengthen compliance and risk management protocols, empower gatekeepers such as lawyers and accountants to better monitor, and enhance the social contract between business and society. The purpose of this article is to promote a systems approach to decision-making in matters of corporate governance, highlight the importance given to systems by recent Delaware courts, and present recommendations for boards of directors to optimally situate themselves within an effective organization-wide system of governance.