The New 'Public' Corporation

Abstract

The United States has experienced a financial crisis, a market crash, and a shift in the perception of America’s place in the global economy. New financial reform legislation will increase the role of the government in the socalled private-law world of corporations and will press further on our conception of what the rights and responsibilities of “public corporations” actually are and will push us to reconceive the definitions of public corporations and corporate governance.

This article explores that issue - the definition of public corporation and its impact on corporate governance. Rather than accepting the definition of public corporations as those that are traded in markets, this article argues that, when viewed in light of the ways in which society’s views of corporations have changed, that definition is impoverished. Public corporations are not just creatures of Wall Street. They are creatures of Main Street, the media, bloggers, Congress, and the government. Indeed, the article argues, it is the failure of the fiduciaries of public corporations to understand their “publicness” that accounts for many of the recent scandals.