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Articles 1 - 3 of 3
Full-Text Articles in Law
Should Corporations Have A Purpose?, Jill E. Fisch, Steven Davidoff Solomon
Should Corporations Have A Purpose?, Jill E. Fisch, Steven Davidoff Solomon
All Faculty Scholarship
Corporate purpose is the hot topic in corporate governance. Critics are calling for corporations to shift their purpose away from shareholder value as a means of addressing climate change, equity and inclusion, and other social values. We argue that this debate has overlooked the critical predicate questions of whether a corporation should have a purpose at all and, if so, what role it serves.
We start by exploring and rejecting historical, doctrinal, and theoretical bases for corporate purpose. We challenge the premise that purpose can serve a useful function either as a legal constraint on managerial discretion or as a …
Governance By Contract: The Implications For Corporate Bylaws, Jill E. Fisch
Governance By Contract: The Implications For Corporate Bylaws, Jill E. Fisch
All Faculty Scholarship
Boards and shareholders are increasing using charter and bylaw provisions to customize their corporate governance. Recent examples include forum selection bylaws, majority voting bylaws and advance notice bylaws. Relying on the contractual conception of the corporation, Delaware courts have accorded substantial deference to board-adopted bylaw provisions, even those that limit shareholder rights.
This Article challenges the rationale for deference under the contractual approach. With respect to corporate bylaws, the Article demonstrates that shareholder power to adopt and amend the bylaws is, under Delaware law, more limited than the board’s power to do so. As a result, shareholders cannot effectively constrain …
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 …