Some Issues Of Good Faith In The Performance Of Corporate Governance
Keywords:
good faith, corporate governance, corporate relations, business judgement rule, corporate bodies.Abstract
The article is devoted to the research of good faith as one of the principles of economic law in the performance of corporate governance. Problems of the meaning of good faith notion are being considered, foreign experience is being examined in an effort to objectify the standards of good faith corporate governance. Good faith being an evaluative category, it has been established that it can be filled with specific meaning only by court (application of the “a contrario” method is also acceptable). However, in order to ensure the unanimity of case law, it is proposed to summarize and to objectify the most common behavioral standards of good faith (or bad faith, if “a contrario” method is applied) in respect of corporate relations on the level of resolution of the plenum of the Supreme Court of Ukraine. It is particularly emphasised that since entrepreneurial activity is always risky, negative implications of a certain managerial decision themselves cannot yet be indicative of bad faith of a corporate body in charge of this decision. Therefore, the doctrine of business judgement rule (that is applied across USA and certain civil law countries) is examined for the purpose of the follow-up studies on latitude limits of managerial decisions that meet good faith standards. It is emphasized that introduction of a similar doctrine into Ukrainian legislation is premature. Taking into account the state of corporate relations development in Ukraine, it seems instead that it is best for the court to define latitude limits of managerial decisions that meet good faith standards.
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