According to Wikipedia:
Director primacy is a theory of the firm that was introduced by Bainbridge in an article in Northwestern University Law Review in 2003 (Vol 97 No 2). He argues that traditional firm theory is based on a false premise that the board's authority derives from the owners. He argues that while the board is appointed by the owners, the nature of the appointment is one in which the power to be exercised is not under the control of the appointing members. Once appointed then, directors are almost unfettered in their exercise of their powers. However, they are subject to overarching fiduciary responsibility which aligns their required actions with a shareholder wealth maximization principle.
For a concise summary of director primacy, see my 2011 blog post Director primacy in 5 minutes worth of bullet points.
Bill Bratton is a fellow corporate law scholar and one for whom I have great admiration. But I must quibble with something he wrote recently:
For most of the twentieth century there had prevailed a managerialist model of corporate governance that endorsed the delegation of substantial discretion to managers. But, at the century's close, the absolutist view represented a minority perspective.468
468 Steve Bainbridge was the leading proponent. See, e.g., Stephen M. Bainbridge, Director Primacy: The Means and Ends of Corporate Governance, 97 Nw. U. L. Rev. 547 (2003); Stephen M. Bainbridge, Director Primacy in Corporate Takeovers: Preliminary Reflections, 55 Stan. L. Rev. 866 (2002).
William W. Bratton, A History of Corporate Law Federalism in the Twentieth Century, 47 Seattle U.L. Rev. 781, 859 (2024).
In fact, I have always tried very hard to distinguish director primacy from managerialism. Director primacy is not intended to explain or defend "delegation of substantial discretion to managers." It is intended to explain and defend delegation of substantial discretion to directors.
In my view, that distinction is critical. As I explain at some length, "Director primacy should not be confused with what might be termed contractarian managerialism.'” Stephen M. Bainbridge, Director Primacy: The Means and Ends of Corporate Governance, 97 Nw. U.L. Rev. 547, 561 (2003). (The argument extends to page 563.)
I critiqued classic accounts of corporate governance because they failed "to distinguish between directors and officers. They thus ignored significant attributes of the board of directors that deserve special attention." Id. at 561. And I concluded that:
In situations of overt conflict between the board and top management, the board's authority prevails as a matter of law, if not always in practice. In sum, because the formal structure of corporation law mandates that management is subordinate to the board of directors and because board capture no longer has as much real-world relevance as it once did, director primacy proves superior to managerialism from both normative and positive perspectives.