A New Urban Front for Shareholder Primacy

Abstract

The hundredth anniversary of Dodge v. Ford marks an occasion to reflect upon what, if anything, has changed about shareholder primacy in a century. Seizing this opportunity, this Article analyzes new local laws and ordinances that mandate stakeholder governance and engagement, which seek to protect the interests of non-shareholder constituencies such as workers, the environment, and the communities in which corporations operate, among others. In doing so, this Article argues that such local laws meaningfully differ from traditional stakeholder protections in the ways that they weaken managerial accountability to shareholders. The emergence of these city laws creates a new urban front for shareholder primacy, with practical implications for the community benefits movement and theoretical implications for our understanding of the nature of corporate law itself.

Keywords: shareholder primacy, shareholder wealth maximization, shareholder profit maximization, stakeholder governance, stakeholder protection, local law, community benefits, community benefits agreement, community benefits ordinance