Open Access. Powered by Scholars. Published by Universities.®
Articles 1 - 2 of 2
Full-Text Articles in Law
Milton Friedman Has A Lot To Answer For: A Response To Joshua Fershee's "Long Live Director Primacy: Social Benefit Entities And The Downfall Of Social Responsibility", Becky Jacobs
College of Law Faculty Scholarship
In his seminal article, economist Milton Friedman restated his position that "there is one and only one social responsibility of business - to use its resources and engage in activities designed to increase its profits ... ." Evangelical Friedman preached to an appreciative choir, and his shareholder wealth maximization ("SWM") theory, emphasis intended, has survived Gordon Gekko's "greed is good" era to become a foundational corporate doctrine. While, as my colleague Joan Heminway so succinctly notes, "none of [the relevant] statutory frameworks regarding officer and director management or conduct mention no less require - management action in a manner that …
When Social Enterprises Fail, Jonathan Brown
When Social Enterprises Fail, Jonathan Brown
Elisabeth Haub School of Law Faculty Publications
This Article identifies the conflicts between social enterprise legislation and bankruptcy law and presents a normative argument for a legal regime that would harmonize the two. Focusing on benefit corporations, the most widely adopted social enterprise form, this Article observes that existing law leaves uncertainty as to the role of directors at a time of financial distress and will produce outcomes that are at odds with the core goals of social enterprise legislation. Then, drawing on academic proposals for contract-based systems of bankruptcy, this Article argues that just as a firm may opt out of a corporate governance norm of …