Corporate Aid to Governmental Authority – Abstract
Posted by The Situationist Staff on June 23, 2013
Situationist Contributor David Yosifon recently posted another thoughtful and provocative article on corporate law. The article, titled “Corporate Aid to Governmental Authority: History and Analysis of an Obscure Power in Delaware Corporate Law” (forthcoming in University of St. Thomas Law Journal) can be downloaded for free on SSRN. Here’s the abstract.
The Delaware General Corporation Law contains an obscure provision stating that all corporations have the power to “[t]ransact any lawful business which the corporation’s board of directors shall find to be in aid of governmental authority.” 8 DGCL §122(12). This oddly worded provision has never been applied, analyzed, or interpreted by any court. It has received almost no treatment by corporate law scholars. This lack of attention is surprising, given that by its own terms the provision seems to bear on fundamental corporate law themes, such as the purpose of corporations, the scope of directors’ fiduciary obligations and discretion, and the relationship between corporate law and corporate social responsibility. In this Article, I examine the history behind this strange provision and analyze its applicability to pressing social policy questions surrounding corporate law.
My analysis leads both to narrow and broad policy conclusions. The narrow conclusion is that §122 of the Delaware corporate code is a textual mess that should be amended at least for coherence and clarity. The broad conclusion is that the analysis herein contributes to the case for reforming corporate governance law to require directors to actively attend to the interests of multiple stakeholders, not just shareholders.
Related Situationist posts:
- Marjorie Kelly Speaks at Harvard Law
- Our Stake in Corporate Behavior
- Taking the Situation of Consumers Seriously
- Against Freedom of Commercial Expression – Abstract
- Merchants of Discontent – Abstract
This entry was posted on June 23, 2013 at 12:01 am and is filed under Abstracts, Deep Capture, Law, Legal Theory. Tagged: corporate governance, corporate law, corporate social responsibility, Jurisprudence, shareholder primacy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.