The Citizens United Gambit in Corporate Theory: A Reply to Bainbridge on Strine and Walter

Abstract

In a forthcoming article, Chief Justice of the Delaware Supreme Court Leo Strine and Nicholas Walter contribute to a growing chorus of analysts insisting that the United States Supreme Court’s decision in Citizens United v. FEC (2010) undermines the viability of the shareholder primacy norm in corporate theory. Professor Stephen Bainbridge has published a critique of Strine and Walter’s argument. In this brief essay, I criticize Bainbridge’s critique, and argue that the Citizens United gambit in corporate theory is indeed a compelling challenge to shareholder primacy theory.

Keywords: corporate social responsibility, shareholder primacy, shareholder wealth maximization, corporate governance, director primacy, Bainbridge, CSR