Doctor Leo and Justice Strine
24 Pages Posted: 27 Apr 2022 Last revised: 27 Sep 2022
Date Written: April 13, 2022
Written for a symposium on Leo Strine, this Article analyzes a tension in Strine’s writing. While he was Chief Justice of the Delaware Supreme Court, he wrote two of the most powerful defenses of the proposition that corporations must ultimately be run in the interest of their shareholders, and their shareholders alone. And yet, for years he has shown some affinity for the interests of workers and other ESG matters and recently he has co-written an article making a (guarded) case for worker representation on corporate boards, along with increased support of unions and German-style works councils.
The Article argues that Strine provides the best available defense of Delaware’s shareholder wealth maximization norm, based on the allocation of authority in corporate law. It then analyzes several ways in which Strine attempts to reconcile this pro-shareholder norm with a concern for workers and other stakeholders. Strine argues for protecting stakeholders through strengthened external regulation in other areas of law, through the Caremark compliance duty, and through regulation of shareholder activism. These strategies all help, but they do not go far enough, particularly in protecting workers. Strine may now recognize this, with his move towards considering the direct involvement of workers in corporate governance. The Article applauds this move.
Keywords: Strine, shareholder primacy, corporate governance, stakeholder governance, employees
JEL Classification: D20, J50, K20, L21
Suggested Citation: Suggested Citation