Benefit Corporation Law and Governance

CHAPTER TWOFiduciary Duties for Conventional Corporations

ENFORCING SHAREHOLDER PRIMACY

Chapter 1 discussed the context in which the modern business corporation operates. This chapter focuses on one critical aspect of the modern conventional corporation: shareholder primacy. It begins with a discussion of some basic corporate law rules, establishing that corporations are a representative system, where shareholders elect directors who manage the corporation. It then discusses, in detail, the historical tug and pull between shareholder primacy and governance oriented toward the interests of all stakeholders. It then shows that, for now, shareholder primacy has emerged as the dominant model in the United States. The chapter then discusses how stakeholders ...