Reconsidering board oversight duties after the financial crisis

The financial crisis has yielded significant losses for shareholders, and for the greater society. Shareholder suits arguing that boards should have been more active monitors have failed. We argue here for an expansion of board monitoring duties. The crisis suggests that corporations may sometimes abuse the privilege of limited liability. Boards should be charged with monitoring for risks arising from corporations' operations and procedures (including their compensation practices) that might significantly harm both shareholders and society at large.