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Full-Text Articles in Law
Contested Visions: The Value Of Systems Theory For Corporate Law, Tamara Belinfanti, Lynn A. Stout
Contested Visions: The Value Of Systems Theory For Corporate Law, Tamara Belinfanti, Lynn A. Stout
Cornell Law Faculty Publications
Despite the dominant role corporations play in our economy, culture, and politics, the nature and purpose of corporations remains hotly contested. This conflict was brought to the fore in the recent Supreme Court opinions in Citizens United and Hobby Lobby. Although the prevailing narrative for the past quarter-century has been that corporations “belong” to shareholders and should pursue “shareholder value,” support for this approach, which has been justified as essential for managerial accountability, is eroding. It persists today primarily in the form of the argument that corporations should seek “long-term” shareholder value. Yet, as this Article shows, when shareholder value …
Shareholder Voting And The Symbolic Politics Of Corporation As Contract, Grant M. Hayden, Matthew T. Bodie
Shareholder Voting And The Symbolic Politics Of Corporation As Contract, Grant M. Hayden, Matthew T. Bodie
Faculty Journal Articles and Book Chapters
American corporations are structured in such a way that shareholders, and shareholders alone, have the right to vote in all significant corporate decisions. Over the years, this exclusive shareholder franchise has been supported by an ongoing procession of justifications. But as those arguments have fallen by the wayside, shareholder primacists have circled back and latched upon a final argument for the special voting status of shareholders, arguing that this fundamental feature of corporate governance is the product of the set of freely-bargained-for agreements among all corporate constituents. Because this set of agreements reflects the preferences of all parties to the …
From Corporate Law To Corporate Governance, Ronald J. Gilson
From Corporate Law To Corporate Governance, Ronald J. Gilson
Faculty Scholarship
In the 1960s and 1970s, corporate law and finance scholars gave up on their traditional approaches. Corporate law had become “towering skyscrapers of rusted girders, internally welded together and containing nothing but wind.” In finance, the theory of the firm was recognized as an “empty box.” This essay tracks how corporate law was reborn as corporate governance through three examples of how we have usefully complicated the inquiry into corporate behavior. Part I frames the first complication, defining governance broadly as the company’s operating system, a braided framework of legal and non-legal elements. Part II adds a second complication by …