Misfeasance, nonfeasance, and malfeasance are types of failure to discharge public obligations existing by common law, custom, or statute.


What is ‘Malfeasance’

Malfeasance is an act of outright sabotage in which one party to a contract commits an act that causes intentional damage. A party that incurs damages by malfeasance is entitled to settlement through a civil lawsuit. Proving malfeasance in a court of law is often difficult, as the true definition is rarely agreed upon.

Explaining ‘Malfeasance’

Corporate malfeasance describes major and minor crimes committed by officers of a company. Such crimes may involve committing intentional acts that harm the corporation or failure to perform duties and adhere to related laws. Corporate malfeasance can result in serious problems within an industry or a country’s economy. As the incidence of corporate malfeasance increases, countries pass more laws and take more preventative measures, minimizing the amount of crime taking place globally.

Examples of Malfeasance

In October 2001, Enron Corporation disclosed a quarterly loss of $618 million. Enron was hiding significant financial losses by utilizing creative accounting under the advice of its auditor, the Arthur Anderson firm. The firm was found guilty of shredding incriminating documents pertaining to its advisory and auditing of Enron. Issuing deceptive financials and conspiring to obstruct justice by hiding or destroying documents are serious crimes.

Further Reading

  • Reputations and corporate malfeasance: collusive networks in financial statement fraud – [PDF]
  • Corporate malfeasance and the myth of shareholder value – [PDF]
  • The effects of organizational and political embeddedness on financial malfeasance in the largest US corporations: Dependence, incentives, and opportunities – [PDF]
  • Malfeasance in the charitable sector: Determinants of “soft” corruption at nonprofit organizations – [PDF]
  • Universities Behaving Badly: The Impact of Athletic Malfeasance on Student Quality and Enrollment – [PDF]
  • Tax havens: conduits for corporate tax malfeasance – [PDF]
  • The great escape: The unaddressed ethical issue of investor responsibility for corporate malfeasance – [PDF]
  • Money, malfeasance, and a Malaysian election – [PDF]
  • Agent compensation and the limits of bonding – [PDF]