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Leo Strine, Chief Justice of the Delaware Supreme Court - Delaware Benefit Corporations: Making It Easier for Directors To “Do The Right Thing” in Harvard Business Law Review — The Harvard Law School Forum on Corporate Governance and Financial Regul
Pdf of a recently published an article in the Harvard Business Law Review. -- Abstract - Some scholars(..) argue that managers should “do the right thing,” while ignoring that in the current corporate accountability structure, stockholders are the only constituency given any enforceable rights, and thus are the only one with substantial influence over managers. Few (..real proposals) that would give corporate managers more ability and greater incentives to consider the interests of other constituencies. This Article posits that benefit corporation (bencorps) statutes have the potential to change the accountability structure within which managers operate. Certain provisions (..) can create a meaningful shift in the balance of power that will in fact give corporate managers more ability to and impose upon them an enforceable duty to “do the right thing.” But (..) important questions must be answered to determine whether (bencorp) statutes will have the durable, systemic effect desired. (1) the initial wave of entrepreneurs who form (bencorps) must demonstrate a genuine commitment to (..CSR) to preserve the credibility of the movement. (2) (..) socially responsible investment funds must be willing to vote their long-term consciences instead of cashing in for short-term gains. To that end, it is crucial that (bencorps) show that doing things “the right way” will be profitable in the long run. (3) (bencorpos) must pass the “going public” test. Finally, subsidiaries that are governed as (bencorps) must honor their commitments and grow successfully, if the movement is to grow to scale. - downloaded pdf to Note
article  US_legal_system  corporate_law  corporate_governance  corporate_citizenship  corporate_ownership  corporate_control  principal-agent  management  CSR  institutional_investors  investment-socially_responsible  stakeholders  investment  accountability  benefit_corporations  public_interest  common_good  downloaded  EF-add 
november 2014 by dunnettreader

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