Comply-and-Explain: Should Directors Have a Duty to Inform?

Wilcox discusses the compliance of the duty to inform of directors of publicly held companies. The expected long-term impact of a duty to inform would be to "operationalize" corporate governance policies and accustom boards to provide greater transparency about their deliberations and decisions on matters relating to governance, business oversight, and strategy. Regardless of whether a directors' duty to inform can be inferred from the Model Business Corporation Act or other provisions of state law, it could be implemented through the adoption of a charter or bylaw amendment initiated by the board or by shareholders.