Corporate Charity: An Oxymoron?

The business judgment rule gives corporate managers and directors a great deal of deference in making business decisions, as long as they are made in a good faith effort to create shareholder value. But this standard may be too forgiving when it comes to charitable contributions, which have a greate...

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Bibliographic Details
Published in:The Business Lawyer 1999-05, Vol.54 (3), p.997-1005
Main Author: Minow, Nell
Format: Article
Language:English
Subjects:
Analysis
Boards of directors
Business executives
Business expenditures
Business judgment rule
Charitable contributions
Charitable giving
Charity
Commercial law
Conflicts of interest
Consumer goods industries
CORPORATE GOVERNANCE SYMPOSIUM
Corporate management
Corporations
Disclosure
Donations
Expenditures
Hammers
Laws, regulations and rules
Proxy statements
Shareholder relations
Shareholders
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Summary:The business judgment rule gives corporate managers and directors a great deal of deference in making business decisions, as long as they are made in a good faith effort to create shareholder value. But this standard may be too forgiving when it comes to charitable contributions, which have a greater potential for conflicts of interest and a smaller capacity to measure results. Corporate charitable contributions should be evaluated as marketing or advertising expenditures and should be fully disclosed to shareholders to minimize the potential for conflicts of interest.
ISSN:0007-6899
2164-1838