Fiduciary duty to sue?

Your corporation has a contract with a third party, and the third party fails to perform under that contract, causing your corporation monetary damage.  Does your company have the fiduciary duty to its shareholders to sue for damages?  A fiduciary duty is much more than just a duty.

“Highmark Sues U.S. Over Affordable Care Act,” The Wall Street Journal, May 18, 2016 B1, where   Highmark is an insurer who argues that the US government failed to pay Highmark all the money owed for risk corridor payments, which were allegedly promised (and contractually agreed) as part of the original Afordable Care Act rollout.  Later, the suit says, the government decided to limit the payments to the amount recovered from other insurers, so that the entire program was revenue-neutral.

Well, it was revenue-neutral for the government.  Apparently less so for Highmark.

This goes to the heart of corporate governance, in the sense of  a corporation owing a fiduciary duty to its shareholders to enforce its contracts and its corporate policies, to protect the corporation’s assets (including the information assets), and to comply with the applicable laws.  And the duty of the government to live by its obligations.

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Filed under Compliance, Directors, Duty, Duty of Care, Governance, Oversight, Protect assets

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