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Full-Text Articles in Law
The Corporation As Sovereign, Allison D. Garrett
The Corporation As Sovereign, Allison D. Garrett
Maine Law Review
In the past two hundred years, sovereignty devolved from the monarch to the people in many countries; in our lifetimes, it has devolved in several significant ways from the people to the corporation. We are witnesses to the erosion of traditional Westphalian concepts of sovereignty, where the chess game of international politics is played out by nation-states, each governing a certain geographic area and group of people. Eulogies for the nation-state often cite globalization as the cause of death. The causa mortis is characterized by the increase in the power and normative influence of supranational organizations, such as the United …
Amending Corporate Charters And Bylaws, Albert H. Choi, Geeyoung Min
Amending Corporate Charters And Bylaws, Albert H. Choi, Geeyoung Min
All Faculty Scholarship
Recently, courts have embraced the contractarian theory that corporate charters and bylaws constitute a “contract” between the shareholders and the corporation and have been more willing to uphold bylaws unilaterally adopted by the directors. This paper examines the contractarian theory by drawing a parallel between amending charters and bylaws, on the one hand, and amending contracts, on the other. In particular, the paper compares the right to unilaterally amend corporate bylaws with the right to unilaterally modify contract terms, and highlights how contract law imposes various limitations on the modifying party’s discretion. More generally, when the relationship of contracting parties …
A Legal Theory Of Shareholder Primacy, Robert J. Rhee
A Legal Theory Of Shareholder Primacy, Robert J. Rhee
Working Papers
Shareholder primacy is the most fundamental concept in corporate law and corporate governance. It is widely embraced in the business, legal, and academic communities. Economic analysis and policy arguments advance a normative theory that corporate managers should maximize shareholder wealth. Academic literature invariably describes shareholder primacy as a “norm.” But whether the concept is “law” is contested because, remarkably, we still do not have a coherent legal theory. Our understanding of a fundamental tenet of the field is flawed and incomplete. This article presents a positive legal theory of shareholder primacy. It answers the questions: Is shareholder primacy law? What …