In my last post I discussed the traditional corporate paradigm, which focuses on shareholder wealth maximization. Even with my caveats, I received some push-back. I encourage you to read the thoughtful comments (many arguing against the shareholder wealth maximization norm) and Professor Bainbridge’s impressive 7 responsive, detailed posts, linked to here (many defending the shareholder wealth maximization norm, at least as it applies to directors' duties).
While the distinguished commenters represented a wide range of views, they did appear to acknowledge the existence of a persistent belief that U.S. corporate law (primarily DE) directs for-profit directors to focus on shareholder wealth maximization. That persistent belief might be as powerful as any “reality.” (Bill Callison referred to it as the "conventional wisdom.") Just ask your average corporate director to explain the end to which the law says his/her powers should be employed. I would bet a pretty penny that the vast majority will mention some form of the phrase “shareholder wealth maximization.”
Benefit corporation statutes are designed to break the persistent belief that directors should primarily focus on shareholder wealth maximization in their governance of corporations.
Interesting idea.
