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Full-Text Articles in Law
The Social Relations Of Consumption: Corporate Law And The Meaning Of Consumer Culture, David Yosifon
The Social Relations Of Consumption: Corporate Law And The Meaning Of Consumer Culture, David Yosifon
Faculty Publications
A mature assessment of the society we are making for ourselves, and the legacy we are leaving to the future, must come to terms with consumer culture. Theoretical discourse, as well as common experience, betray persistent ambiguity about what consumerism means to and says about us. In this Article, I argue that this ambiguity can in part be explained by examining the social relations of consumption in contemporary society. These involve, crucially, the relationship between producer and consumer that is dictated by corporate governance law, and embodied in the decision-making dynamics of the directors who command corporate operations. The enigmatic …
Is Corporate Patriotism A Virtue?, David Yosifon
Is Corporate Patriotism A Virtue?, David Yosifon
Faculty Publications
American social and political discourse attests to widespread concern about whether domestic corporations can be counted on to serve the national interest. This issue is especially pressing in an era of international corporate operations, in which firms can send jobs and tax revenues overseas, devastating local communities even as they boost the prospects of workers in a foreign land, and the interests of capital spread across the globe. Firms founded in America can also disperse across the border productive resources that could otherwise be nationalized or made available to the homeland in times of crisis or war. Indeed, the shareholder …
Opting Out Of Shareholder Primacy: Is The Public Benefit Corporation Trivial?, David Yosifon
Opting Out Of Shareholder Primacy: Is The Public Benefit Corporation Trivial?, David Yosifon
Faculty Publications
The central command of corporate governance law is that directors must serve the shareholder interest. Directors may not sacrifice shareholder value in favor of other corporate stakeholders or other interests. In this Article, I examine whether this rule of shareholder primacy is mandatory, or merely a default rule which can be altered through private ordering. I argue that Delaware’s corporate law, the most important corporate law in the United States, should be understood to have long-permitted privately-ordered deviation from shareholder primacy. This assessment, however, is at least complicated by the recent legislative creation of the Public Benefit Corporation (PBC). The …
The Law Of Corporate Purpose, David Yosifon
The Law Of Corporate Purpose, David Yosifon
Faculty Publications
Delaware corporate law requires directors to manage firms for the benefit of the firm’s shareholders, and not for any other constituency. Delaware jurists have been clear about this is in their case law, and they are not coy about it in extra-judicial settings, such as in speeches directed at law students and practicing members of the corporate bar. Nevertheless, the reader of leading corporate law scholarship is continually exposed to the scholarly assertion that the law is ambiguous or ambivalent on this point, or even that case law affirmatively empowers directors to pursue non-shareholder interests. It is shocking, and troubling, …
Corporate Aid To Governmental Authority: History And Analysis Of An Obscure Power In Delaware Corporate Law, David Yosifon
Corporate Aid To Governmental Authority: History And Analysis Of An Obscure Power In Delaware Corporate Law, David Yosifon
Faculty Publications
The Delaware General Corporation Law contains an obscure provision stating that all corporations have the power to “[t]ransact any lawful business which the corporation’s board of directors shall find to be in aid of governmental authority.” 8 DGCL §122(12). This oddly worded provision has never been applied, analyzed, or interpreted by any court. It has received almost no treatment by corporate law scholars. This lack of attention is surprising, given that by its own terms the provision seems to bear on fundamental corporate law themes, such as the purpose of corporations, the scope of directors’ fiduciary obligations and discretion, and …
Consumer Lock-In And The Theory Of The Firm, David Yosifon
Consumer Lock-In And The Theory Of The Firm, David Yosifon
Faculty Publications
When shareholders invest in a corporation they become “locked-in” to the prospects of that firm. A shareholder cannot force the firm to buy back her shares, nor can she force it to dissolve and turn over her pro rata share of its assets. She gets nothing for her capital unless the firm profits and pays dividends, or she finds someone else willing to buy her stock. Corporate law scholars have recognized that capital “lock-in” is both a corporate law solution that enables large-scale business to flourish, and a corporate law problem that threatens the growth and proper governance of big …
The Public Choice Problem In Corporate Law: Corporate Social Responsibility After Citizens United, David Yosifon
The Public Choice Problem In Corporate Law: Corporate Social Responsibility After Citizens United, David Yosifon
Faculty Publications
The Supreme Court held in Citizens United v. Federal Elections Commission (2010) that the First Amendment forbids Congress from restricting the political speech of corporations. While corporate theory did little to inform the Court’s thinking in Citizens United, this Article argues that the holding in Citizens United requires us to rethink corporate theory. The shareholder primacy norm in American corporate governance relies on the assumption that corporations can be restrained from influencing external governmental operations. We can enjoy the efficiencies generated by shareholder primacy in corporate governance, mainstream corporate theorists have long argued, because we can rely on external regulation …
Towards A Firm-Based Theory Of Consumption, David Yosifon
Towards A Firm-Based Theory Of Consumption, David Yosifon
Faculty Publications
Corporate theory typically construes consumption activity as involving a series of arms-length, atomistic transactions in which consumers exchange money for discrete corporate goods or services. Canonical accounts expect satisfied consumers to engage in repeat transactions, but the transactions themselves are (implicitly or explicitly) assumed to be isolated, fully contained dealings with the firm. Such a view of consumption supports the inference that consumers can readily manage their own interests in corporate operations through serial decisions to “take it,” “leave it,” repeat, or refuse to repeat patronization of a firm. This assessment plays an important part in justifying American corporate governance …