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The First Amendment and Corporate Governance

39 Pages Posted: 13 Jan 2011 Last revised: 14 Jul 2011

Larry E. Ribstein

University of Illinois College of Law (deceased); PERC - Property and Environment Research Center

Date Written: January 12, 2011

Abstract

The Supreme Court's decision in Citizens United did not end the controversy over regulating corporate speech. Although the Court broadly subjected regulation of corporate speech to the First Amendment, it did not wholly preclude regulation of corporate governance processes that produce corporate speech. The Court's opinion therefore shifted debate concerning corporate speech from corporations' external distortion of the political process to their internal distortion of shareholders' self-expression. This paper shows that regulation of the corporate governance process that produces speech faces significant obstacles under the First Amendment. These include the limited efficacy of regulation of corporate governance, regulation's potential for protecting the expressive rights of some shareholders by suppressing others, and the uncertain implications of this rationale for types of speech other than that involved in Citizens United. These problems with the corporate governance rationale for regulating corporate speech suggest that protection of shareholders' expressive rights may be trumped by society's interest in hearing corporate speech and the First Amendment's central goal of preventing government censorship.

JEL Classification: K22, K48, K42

Suggested Citation

Ribstein, Larry E., The First Amendment and Corporate Governance (January 12, 2011). Georgia State University Law Review, Vol. 27, No. 4, 2011; Illinois Program in Law, Behavior and Social Science Paper No. LBSS11-05; Illinois Public Law Research Paper No. 10-24. Available at SSRN: https://ssrn.com/abstract=1739264

Larry Edward Ribstein (Contact Author)

University of Illinois College of Law (deceased)

PERC - Property and Environment Research Center

2048 Analysis Drive
Suite A
Bozeman, MT 59718
United States

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