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I believe liability must rest on he who makes the decision. Will the following work? 1. An executive must carry some personal liability for the decisions he t

I believe liability must rest on he who makes the decision. Will the following work? 1. An executive must carry some personal liability for the decisions he took during his tenure. 2. If the decision was made with the knowledge of the board of directors, directors too, carry some liability. 3. If you are an investor, you carry the same percentage of liability as stock. E.g. if you own 10% stock, you are directly liable for $1 million of a $10 million liability (financial or legal). 4. Investors are expected to do their due diligence before buying stock in a company that may be exposed to liability. 5. Investor liability for decisions made in accordance with corporate policies is unlimited.

einhverfr 13y ago
> If you are an investor, you carry the same percentage of liability as stock. E.g. if you own 10% stock, you are directly liable for $1 million of a $10 million liability (financial or legal). I think there is where you run into problems. The real problem is that the investor really is not in a position to ensure that the company is run a certain way. Now if the shareholders vote on a resolution to dump toxic waste in the river, then I think applying liability to the vote in proportion to the share is appropriate. But then those who vote against would have no liability. The reason why limited liability exists is to help ensure that non-decision-makers are protected from the decisions of others. But if you aren't going to give them protection, why not also have a rule that banks who loan money to corporations are liable for misuse of the money loaned?