| Informed decision-making by corporate boards depends on the availability of adequate information, highlighting the importance of horizontal information flow from individual directors to the board. However, collective action deficiencies and increasing director heterogeneity have created a structural challenge for such horizontal information flow. Grounded in the duty of care, a duty of disclosure could mitigate the information asymmetry in boardrooms and improve impeded communication. Informed directors should disclose to the board or all other directors, in a timely manner, information that is material enough to reasonably warrant the attention of the majority of the directors, or to alter the judgment of an individual director in decision-making. When collective decision-making fails and results in corporate losses, the assessment of individual directors’ liability should consider both the collective responsibility of the board and informed directors’ fulfillment of their disclosure obligations, to realize the distinguish and compatibility between the collective liability of the board and the liability of individual directors. Timely fulfillment of the duty of disclosure before the resolution of the board is also essential for mitigating liability for informed directors. |
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