Filioque of the general company law | Allen Matkins
The Nicene Creed as approved by the Council of Constantinople in AD 381 included the following: “τὸ ἐκ τοῦ πατρὸς ἐκπορευόμενον (which proceeds from the father). About 200 years later, at the Third Council of Toledo, the Church Western Christian, who used Latin rather than Greek, added the word, Filioqueto the creed – procedure ex Patre Filioque (which proceeds from the Father and the Son). This may seem like a minor change, but adding Filocked became one of the main causes of the schism between the Orthodox and Catholic churches in 1054 AD
As originally enacted, Section 309(a) of the California Corporations Code required directors to perform their duties “in good faith.” [and] in a manner that the director believes to be in the best interests of the corporation”. This wording is consistent with the wording of Section 8.30(a) of the Model Business Corporation Act – “in a manner that the director believes reasonably be in the best interests of the corporation. “interests of the corporation.” In 1987, the California legislature added “and its shareholders” to section 309(a). 1987 Cal. Stats. Ch. 1203, § 2. According to the California Marsh Corporation Act:
This amendment made no change to California law, since California courts have consistently held, as the quotes above illustrate, that directors owe a fiduciary duty to shareholders as the beneficial owners of the corporation and not merely to a disembodied entity. called “the company”.
1 Harold Marsh, Jr., Keith Paul Bishop and R. Roy Finkle, Marsh’s California Corporation Law § 10.06 (5e Ed. 2020).
Some shareholders, however, might know more about this change. For example, James McRitchie recently filed a lawsuit against Meta Platforms, Inc. and several individuals alleging:
Although defendants have a duty to operate the company as a business for the financial benefit of its shareholders, these shareholders are often diversified investors whose portfolio interests extend beyond Meta’s financial success. If decisions that maximize the Company’s long-term cash flow also jeopardize the rule of law or public health, the portfolios of its diversified shareholders are likely to be financially harmed by these decisions. As trustees of a company whose business model depends on maintaining a powerful global network, the directors and officers of the Company cannot deliberately ignore this reality: where there is great power, there is great responsibility.
Meta, of course, is a Delaware company and McRitchie’s case won’t hinge on whether the addition of “and its shareholders” changed California law. Whether or not California is filioque was a meaningless addition, I share Professor Ann Lipton’s doubts about Mr McRitchie’s theory.
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