Question

There has been a lot of publicity about the benefit and detriment of activist CEOs in Australian (and

global) business. Write a report describing and explaining the statutory law of directors’ fiduciary

duties as it applies to CEO activism.

a) Define CEO and describe the role.

b) Briefly describe the conduct or behaviour that is referred to as CEO activism and provide one

“real world” example. (Make sure that you reference the source of your example).

c) Discuss the relevant Australian statutory law on directors’ fiduciary duties.

d) Analyse your example of CEO activism and provide an opinion (conclusion) on whether this

conduct meets or breaches the Australian statutory law on directors’ fiduciary duty to act in

the best interests of their company.

Please use ILAC form to write this.

Answer 1

a.A chief executive officer (CEO) is the highest-ranking executive in a company, whose primary responsibilities include making major corporate decisions, managing the overall operations and resources of a company, acting as the main point of communication between the board of directors (the board) and corporat.

b.CEO activism refers to corporate leaders speaking out on social and environmental policy issues not directly related to their company’s core business, which distinguishes it from nonmarket strategy and traditional corporate social responsibility. To provide evidence on how CEO activism can influence public opinions about government policies and consumer attitudes about the CEO’s company.

Example-Goldman Sachs CEO Lloyd Blankfein speaking out publicly about LGBTQ rights.

Corporations and their CEOs have a long history of attempting to influence government policies and legislation on taxation and other issues to affect the marketplace and increase profits. They have also taken stands on social issues by filing amicus briefs in appellate court cases in which they have a strong interest These efforts have generally been directly aligned with business goals and strategy.

c.

Fiduciary duties of a director

• a duty to act in the best interests of the company.
• a duty to act within the powers conferred by the company's memorandum and articles of association.
• a duty not to fetter one's own discretion.
• a duty to avoid a conflict of interest, and.
• a duty not to make unauthorised profit.

d.

CEO activism meets the Australian statutory law on directors’ fiduciary duty to act in the best interests of their company because both are mainly responsible for making management decisions in best interest of company. CEO answers to the board of directors representing the stockholders and owners. The board sets long-term goals and oversees the company. The Direction and Objective of Both CEO and directors is to acheive goal of organisation.