Proportionality, fundamental rights and the duties of directors

Abstract

This article seeks to address the manner in which we should conceptualise the duties of directors in making decisions where fundamental rights are at stake. We first attempt to show that, in making decisions that implicate fundamental rights, directors are required to consider all individuals affected as having an intrinsic dignity. The interests of non-shareholders must thus be addressed in a non-instrumental manner which, we argue, is only compatible with the adoption of a 'stakeholder' conception of directors' duties. Adopting such an approach, however, raises the difficulty of how directors are to balance multiple intrinsically valuable interests. We argue that the doctrine of proportionality-which has been developed in fundamental rights law as a structured enquiry concerning the circumstances in which it is justifiable to limit rights-can be adapted to the domain of corporate decision-making. The proportionality enquiry provides a transparent, structured process of reasoning that can aid corporate decision-making and open up the possibility for reviewing decisions of directors that affect the fundamental rights of individuals.