Corporate Social Responsibility
Human Rights Protections in International Supply Chains - Protecting Workers and Managing Company Risk
David V. Snyder and Susan A. Maslow, 73(4) 1093-1106 (Fall 2018)
Reconsidering Stockholder Primacy in an Era of Corporate Purpose
David J. Berger, 74(3) 659-676 (Summer 2019)
Ideology matters. Since the 1980s stockholder primacy has been the dominant ideology shaping corporate law. As a result, case law, director conduct, and our understanding of “best governance practices” have all been viewed under a single prism: how do these rules impact stockholder value? Even the recent debate over corporate purpose has largely been limited to stockholders, directors, and (of course) academics. Excluded from the debate are the vast majority of the population that owns little or no stock, as well as other corporate stakeholders such as employees and communities. This article considers how the discussion of corporate purpose is limited by stockholder primacy, and how a true debate over corporate purpose may require a reconsideration of the dominant ideology over stockholder purpose.
Interview with Marty Lipton
Jessica C. Pearlman; 75(2): 1709-1724 (Spring 2020)
In September of 2019, after wrapping up meetings of the Mergers and Acquisitions (“M&A”) Committee of the Business Law Section of the American Bar Association (“ABA”), I took the train from Washington, D.C. to New York City to meet with Marty Lipton—the well-known founder of Wachtell, Lipton, Rosen & Katz—in a conference room at his firm. It was perfect timing to have this conversation with Mr. Lipton, given recent developments relating to corporate views on the constituencies corporations may take into account in their decision-making.
Dodge v. Ford Motor Co. at 100: The Enduring Legacy of Corporate Law’s Most Controversial Case
Michael J. Vargas, 75(3): 2103-2122 (Summer 2020)
This article examines Dodge v. Ford on its 100th anniversary. In Dodge v. Ford, the Michigan Supreme Court held that a business corporation is organized for the profit of its shareholders, and the directors must operate it in service to that end. Despite the fact that Dodge v. Ford is rarely cited in judicial opinions, the case continues to spark controversy in legal scholarship. There is little justification for this scholarly attention because the factual basis is little more than a caricature of Henry Ford, and subsequent developments in corporate law have all but eviscerated the precedential value of the case. Rather, the legacy of Dodge v. Ford may simply be that it serves as a convenient talisman, standing for the one sentence anyone actually cares about and rolled out with each new battle in the war between shareholder profit maximization and corporate social responsibility.
Compliance and Ethics Programs: What Lawyers Need to Know to Understand the Development of This Field
Steven A. Lauer and Joseph E. Murphy, 75(4): 2541-2566 (Fall 2020)
Corporate compliance programs, a relatively new phenomenon in the corporate arena, have evolved over the past few decades. What challenges have compliance professionals encountered during that short history? What issues might they face in the coming years? The authors review that history and render some educated guesses as to the answers to that last question in this article.
Profound Change: The Evolution of ESG
A Discussion Among E. Christopher Johnson, Jr., John H. Stout, and Ashley C. Walter, 75(4): 2567-2608 (Fall 2020)
This article has been abstracted from a series of telephone conference discussions among E. Christopher Johnson, Jr., John H. Stout, and Ashley C. Walter, each of whom has chaired committees of the Business Law Section and served as a member of the Council. The discussion focused on the evolution, meaning, and critical importance of the ideas, meanings, and principles embodied in the terms “sustainability,” “CSR” (corporate social responsibility), and ESG (environment, social, and governance). The discussion began before the novel coronavirus and the killing of George Floyd impacted our lives—our country’s and the world’s social, political, and economic well-being and order. The discussion and preparation of this article was heavily influenced by these events as they forced not only an examination of the history of the above terms but also a reflection on their application to, and relevance for, strategically charting a path forward.
Caremark at the Quarter-Century Watershed: Modern-Day Compliance Realities Frame Corporate Directors’ Duty of Good Faith Oversight, Providing New Dynamics for Respecting Chancellor Allen’s 1996 Caremark Landmark
E. Norman Veasey and Randy J. Holland, 76(1): 1-30 (Winter 2020-2021)
Chancellor Allen’s famous and prescient 1996 opinion in Caremark will soon be twenty-five years of age. It has more than stood the test of time. Indeed, it has become gospel as an enduring corporate governance doctrine and a dynamic driver of modern-day oversight and compliance requirements. Although it did not become enshrined as a major Delaware Supreme Court precedent until the Stone v. Ritter Delaware Supreme Court decision in 2006, Chancellor Allen’s 1996 Caremark dictum enjoyed from the outset the international respect of a precedent that had the imprimatur of a Delaware Supreme Court holding.
Putting Benefit Corporation Statutes into Context by Putting Context into the Statutes
Frederick H. Alexander, 76(1): 109-150 (Winter 2020-2021)
Ever since Adam Smith described the efficiency of markets in an age where freedom and property rights were coming to be seen as key elements of the good society, capitalism has honored the concept that capital return at individual enterprises is a good heuristic for their social return. In a complex and interdependent global economy, however, that concept is being challenged, as many question whether the costs of unfettered profit seeking outweigh its benefits. This has led some to challenge the utility of the shareholder primacy doctrine, and others to challenge the utility of capitalism itself.
For Whom Is the Corporation Managed in 2020? The Debate over Corporate Purpose
Edward B. Rock, 76(2): 363-396 (Spring 2021)
A high-profile public debate is taking place over one of the oldest questions in corporate law, namely, “For whom is the corporation managed?” In addition to legal academics and lawyers, high-profile business leaders and business school professors...
Restoration: The Role Stakeholder Governance Must Play in Recreating a Fair and Sustainable American Economy: A Reply to Professor Rock
Leo E. Strine, Jr., 76(2): 397-436 (Spring 2021)
This reply to For Whom Is the Corporation Managed in 2020? The Debate Over Corporate Purpose by Professor Edward Rock supports his depiction of the current state of corporate law in the United States. But by contrast to Professor Rock, I do not...