Directing the directors: Assumptions about the effectiveness of corporate law

Directors are important economic actors. In recent years there has been considerable debate between Australian judges, legislators, and law reformers about the formulation of appropriate liability rules for company directors. This debate relies on a number of assumptions about the effect which law can and ought to have on directors' behaviour. This paper reviews the law, examines these assumptions, and concludes that we have little clear empirical information about the effect of the law in this area.