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Hastings Business Law Journal

Abstract

Should governors serve on the boards of incorporated universities as ex officio members? This article examines the question by considering the expeience of Pennnsylvania State University and analyzes the implications of governors serving on the boards of state- aided corporations by focusing on the fiduciary responsibilities of directors under corporate law. The article concludes that the current statutory framework needs reconsideration and asserts that while there is no question that the state's public interests should trump an institution's "private" interests, it is the state that has chartered the corporation for the promotion of a public good (education) and has appointed the governor to guard the institution's best interests as one of its directors. Accordingly, if the ex officio director is in a position where he may not be able to serve the corporation's interests as a fiduciary, the law must require him to step down from the board,as the current paradigm's constant tensions between public governance political objectives and private corporate governance principles, as defined by centuries of fiduciary law, cannot be sustained.

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