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Has Corporate Law Failed? Addressing Proposals for Reform

20 Pages Posted: 14 Jul 2009  

Antony Page

Indiana University Robert H. McKinney School of Law

Date Written: April 21, 2009

Abstract

Successful corporations create extraordinary wealth. The longstanding question is how this wealth should be distributed. The conventional answer has been shareholder primacy. Most stakeholders, such as customers, suppliers, creditors, and employees, must negotiate their portion ex ante, but everything left over, the residual interest, belongs to the corporation’s shareholders. The progressive answer is that wealth should be distributed fairly to all stakeholders, and that corporations have a social responsibility that goes beyond the mere maximization of shareholder wealth. This essay reviews Kent Greenfield's book, The Failure of Corporate Law: Fundamental Flaws and Progressive Possibilities, that develops and extends the arguments for a broader stakeholder approach.

Keywords: corporate governance, progressive corporate law, corporate social responsibility

JEL Classification: K22

Suggested Citation

Page, Antony, Has Corporate Law Failed? Addressing Proposals for Reform (April 21, 2009). Michigan Law Review, Vol. 107, 2009. Available at SSRN: https://ssrn.com/abstract=1392628

Antony Page (Contact Author)

Indiana University Robert H. McKinney School of Law ( email )

530 West New York Street
Indianapolis, IN 46202
United States
317.278.9037 (Phone)

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