Discussion (1L): Corporate Dilemmas

The principle that corporate managers' sole duty is to maximize shareholders' financial value has never been entirely adhered to in practice and has been increasingly challenged in recent decades. While acknowledging the importance of shareholder value, commentators have argued that corporations should purposively benefit other stakeholders, including customers, employees, and the communities they affect. At the same time, there has been an upswing of investments aligned with investors' social interests, including public equity investments in companies with high environmental, social, and governance (ESG) ratings and private equity "impact investments" that arguably incur greater risks than pure market rate investments. Our seminar will consider a variety of legal, ethical, and policy issues related to corporations' purposes and responsibilities, including when is it legally and ethically appropriate for corporate managers or institutional investors to compromise shareholder value in the pursuit of social, environmental and other non-pecuniary goals; corporate governance structures that reflect interests other than profit maximization; the power of investors to influence corporate behavior through affirmative investments, divestments and shareholder activism; and the power of various stakeholder groups to influence corporate behavior. Class meets 6:30 PM-8:30 PM on Sept. 29, Oct. 11, Oct. 27, Nov. 8.