Corporate Purpose: The US Discussion and the Restatement of the Law of Corporate Governance

Corporate Purpose: The US Discussion and the Restatement of the Law of Corporate Governance

Description

The American Law Institute’s Restatement of Corporate Governance stands in a complex relationship with the current debate over ‘corporate purpose’. On the one hand, against those who would impose an obligation on corporations to adopt a legally enforceable corporate purpose that gives weight to non-shareholder interests even when those interests diverge from shareholder interests, the Restatement makes clear that this is not the rule either in the traditional common law jurisdictions like Delaware or in the states that rejected Delaware’s shareholder primacy by adopting ‘constituency’ statutes. On the other hand, against those who would impose upon directors a duty to maximize stock price, the Restatement makes clear that directors’ discretion is far broader than any such maxim would permit, a discretion that permits directors to take seriously the interests of all stakeholders as they work to promote the value of the corporation.

First Page

127

DOI

https://doi.org/10.1093/oso/9780198912576.003.0006

Source Publication

Corporate Purpose, CSR, and ESG

Source Editors/Authors

Jens-Hinrich Binder, Klaus Hopt, Thilo Kuntz

Publication Date

10-3-2024

Publisher

Oxford University Press

Corporate Purpose: The US Discussion and the Restatement of the Law of Corporate Governance

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