Beyond Internal and External: A Taxonomy of Mechanisms for Regulating Corporate Conduct

37 Pages Posted: 20 Apr 2020 Last revised: 14 Sep 2020

See all articles by Ann Lipton

Ann Lipton

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

Date Written: April 14, 2020


Corporate discourse often distinguishes between internal and external regulation of corporate behavior. The former refers to internal decisionmaking processes within corporations and the relationships between investors and corporate managers, and the latter refers to the substantive mandates and prohibitions that dictate how corporations must behave with respect to the rest of society. At the same time, most commenters would likely agree that these categories are too simplistic; relationships between investors and managers are often regulated with a view toward benefitting other stakeholders.

This Article, written for the New Realism in Business Law and Economics symposium, will seek to develop a taxonomy of tactics available to, and used by, regulators to influence corporate conduct, without regard to their nominal categorization of “external” or “internal” (or “corporate” and “non-corporate”) in order to shed light on how those categories both obscure and misdescribe the existing regulatory framework. By reframing the shareholder/stakeholder debate, we can identify underutilized avenues for encouraging prosocial, and discouraging antisocial, corporate action, and recognize areas of contradiction and incoherence in current regulatory policy. Finally, this exercise will demonstrate how corporations, far from being “privately” ordered, are in fact the product of an overarching set of choices made by state actors in the first instance.

Keywords: corporations, corporate social responsibility, csr, esg, corporate governance

Suggested Citation

Lipton, Ann, Beyond Internal and External: A Taxonomy of Mechanisms for Regulating Corporate Conduct (April 14, 2020). 2020 Wisc. L. Rev. 657, Tulane Public Law Research Paper No. 20-8, Available at SSRN:

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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