April 2009 Vol. 107 No. 6 THE REVIEW

Greenfield: The Failure of Corporate Law: Fundamental Flaws and Progressive Possibilities

Antony Page

Has Corporate Law Failed? Addressing Proposals for Reform

The Failure of Corporate Law: Fundamental Flaws and Progressive Possibilities. By Kent Greenfield. Chicago: University of Chicago Press. 2006. Pp. ix, 288. $45.

Successful corporations create extraordinary wealth. The longstanding question is how this wealth should be distributed. The conventional answer has been shareholder primacy. Most stakeholders, such as customers, suppliers, creditors, and employees, must negotiate their portion ex ante, but everything left over, the residual interest, belongs to the corporation’s shareholders.  The job of the board of directors is thus to maximize the residual interest, thereby creating shareholder value. Nobel Laureate Milton Friedman was perhaps the leading proponent of the shareholder-primacy model of corporate governance, famously arguing that “[f]ew trends could so thoroughly undermine the very foundations of our free society as the acceptance by corporate officials of a social responsibility other than to make as much money for their stockholders as possible.” At least since the days of President Reagan, this laissez-faire approach has tended to prevail, not only among the educated elite but also on the Supreme Court.

   //  VIEW PDF
& Other Current Events

The Tools of Political Dissent: A First Amendment Guide to Gun Registries

On December 23, 2012, a newspaper in upstate New York published a provocative map. On it appeared...

Cultivating Inclusion

Twenty-five years ago, law schools were in the developing stages of a pitched battle for the future of legal...

Aftermarketfailure: Windows XP's End of Support

"After 12 years, support for Windows XP will end on April 8, 2014." So proclaims a Microsoft website with...

Globally Speaking—Honoring the Victims' Stories: Matsuda's Human Rights Praxis

Globally speaking, international law and the vast majority of domestic legal systems strive to protect...

Toward A Multiple Consciousness of Language: A Tribute to Professor Mari Matsuda

I am thrilled to be part of this commemoration of the twenty-fifth anniversary of Professor Matsuda's...
Sign Up to Join Our Mailing List