Not Everything is About Investors: The Case for Mandatory Stakeholder Disclosure

74 Pages Posted: 13 Aug 2019 Last revised: 1 Jun 2021

See all articles by Ann Lipton

Ann Lipton

Tulane University - Law School; Tulane University - The Murphy Institute

Date Written: August 10, 2019


Corporations are constantly required to disclose information, but only the federal securities laws impose generalized public disclosure obligations that offer a holistic overview of corporate operations. Though these disclosures are intended to benefit investors, they are accessible by anyone, and thus have long been relied upon by regulators, competitors, employees, and local communities to provide a working portrait of the country’s economic life.

Today, that system is breaking down. Congress and the SEC have made it easier for companies to raise capital without becoming subject to the securities disclosure system, allowing modern businesses to grow to enormous proportions while leaving the public in the dark about their operations. Meanwhile, the governmentally-conferred informational advantage of large investors allows them to tilt managers’ behavior in their favor, at the expense of consumers, employees, and other corporate stakeholders. As a result, securities disclosures do not provide the comprehensive picture necessary to maintain social control over corporate behavior.

This Article recommends that we explicitly acknowledge the importance of disclosure for noninvestor audiences, and discuss the feasibility of designing a disclosure system geared to their interests. In so doing, this Article excavates the historical pedigree of proposals for stakeholder-oriented disclosure. Both in the Progressive Era, and again during the 1970s, efforts to create generalized corporate disclosure obligations were commonplace. In each era, however, they were redirected towards investor audiences, in the expectation that investors would serve as a proxy for the broader society. As this Article establishes, that compromise is no longer tenable.

Keywords: csr, corporate social responsibility, esg, stakeholder, securities regulation, corporations, sustainability

Suggested Citation

Lipton, Ann, Not Everything is About Investors: The Case for Mandatory Stakeholder Disclosure (August 10, 2019). Yale Journal on Regulation, Forthcoming, Tulane Public Law Research Paper No. 19-11, Available at SSRN: or

Ann Lipton (Contact Author)

Tulane University - Law School ( email )

6329 Freret Street
New Orleans, LA 70118
United States

Tulane University - The Murphy Institute ( email )

6823 St Charles Ave
New Orleans, LA 70118
United States

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