Back in the day I posted some of my thoughts about corporate purpose here. Not too long later I elaborated here when commenting on another piece on the same topic by the Roman Catholic Brian McCall. Suffice it to say that we agreed that the Good of a business corporation should not be reduced to maximizing shareholder wealth.
Not that increasing shareholder wealth is a "bad" but only that, like human persons, there's more to corporate life than barns full of wealth. Indeed, the cases regularly cited in support of the broad principle of shareholder-wealth-maximization (Dodge v. Ford and eBay Domestic Holdings, Inc. v. Newmark) can be read more narrowly to forbid only oppression of some shareholders by others.
And McCall and I also agreed that the competency of the chartering State to evaluate the relative Goodness of corporate purposes is minimal. In other words, directors who seek shareholder wealth above all should not be sanctioned. After all, there's no (human) law against maximizing personal wealth.
On the other hand, neither should corporations seeking to advance a broader notion of the Good find themselves mulcted. In fact, such independence of director judgment about a particular good to be pursued by a corporation is largely protected by the business judgment rule, which allows directors great latitude in valorizing a perceived long-term Good over short-term profitability.
So what, you ask? As a teacher at a school that self-identifies with the Christian tradition, I believe that our law students, in preparation for their roles as public citizens, should enjoy a full-orbed legal education.
All agree (or at least I hope they do) that the "is" (whatever it may be when it comes to the law) does not always equal the "ought." "Separate but equal" was once the law but now it's not. Even in more mundane legal matters, calibrated moral judgments are frequently as important as legal ones. Yet, without some nudges from their teachers, many law graduates will simply default to the lowest pragmatic level of ethical analysis when it comes to advising their clients. We can hope for more. We should strive for more. But it starts with us, their teachers.
Not that increasing shareholder wealth is a "bad" but only that, like human persons, there's more to corporate life than barns full of wealth. Indeed, the cases regularly cited in support of the broad principle of shareholder-wealth-maximization (Dodge v. Ford and eBay Domestic Holdings, Inc. v. Newmark) can be read more narrowly to forbid only oppression of some shareholders by others.
And McCall and I also agreed that the competency of the chartering State to evaluate the relative Goodness of corporate purposes is minimal. In other words, directors who seek shareholder wealth above all should not be sanctioned. After all, there's no (human) law against maximizing personal wealth.
On the other hand, neither should corporations seeking to advance a broader notion of the Good find themselves mulcted. In fact, such independence of director judgment about a particular good to be pursued by a corporation is largely protected by the business judgment rule, which allows directors great latitude in valorizing a perceived long-term Good over short-term profitability.
So what, you ask? As a teacher at a school that self-identifies with the Christian tradition, I believe that our law students, in preparation for their roles as public citizens, should enjoy a full-orbed legal education.
All agree (or at least I hope they do) that the "is" (whatever it may be when it comes to the law) does not always equal the "ought." "Separate but equal" was once the law but now it's not. Even in more mundane legal matters, calibrated moral judgments are frequently as important as legal ones. Yet, without some nudges from their teachers, many law graduates will simply default to the lowest pragmatic level of ethical analysis when it comes to advising their clients. We can hope for more. We should strive for more. But it starts with us, their teachers.
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