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This article explores the duty of “disclosure/complete candor” (among directors, from boards to shareholders and from controllers to minority shareholders) within state corporate fiduciary law (especially Delaware’s, the most developed). It observes the odd minimization of the candor/disclosure duty within the core doctrines of fiduciary care, loyalty and good faith. It analyzes the evolution of the fiduciary disclosure duty and its “moment of truth” in the watershed litigation in Malone v. Brincat. The belated appearance of the fiduciary disclosure duty is partly the result of historical, customary and political understandings which have dwarfed logic and conceptual coherence in this area of law. The customary dividing line between “corporate” law and governance and what’s deemed “federal securities law” and “market regulation,” has been grossly overstated and was untenable, as demonstrated by Congress’ subsequent enactment of the Sarbanes-Oxley Act and corporate law’s humbled stature in (minimally) responding to the massive financial frauds of ’01-’02. A central claim is that the fiduciary disclosure/candor duty is the core principle within fiduciary law: it addresses the informational/power asymmetry that is the root of agency cost problems, inter alia. Too often technical problems relating to the quantification of remedies has derailed corporate law’s force in this area. But adjudicated fiduciary wrongs without remedies are far from trivial: they undermine the legitimacy and vitality of corporate law, even Delaware’s. Recent doctrinal expansion in the duty of disclosure supports this claim, as does the ongoing trend to a ‘knowledge’ based economy. Insights about corporate law pedagogy are also blended into the discussion.


(Symposium: Business Law Education)