Minorities, Shareholder and Otherwise

Abstract

Corporate law understands what constitutional law does not. Minority status matters to law. Where today's constitutional jurisprudence of equal protection aspires to colorblindness, corporate law places minority concerns at the heart of its endeavor. The minorities of corporate law are minority shareholders - investors holding small, noncontrolling interests in the corporation. By contrasting corporate and constitutional law, I begin to conceptualize "minority" status as a legal fact.

I begin by rereading the corporate canon. I show that body's concern not just for wealth maximization, but also its distribution. I reveal corporate law's deep commitment to protecting minority shareholders, operationalized through an elaborate common law and statutory framework.

I then apply corporate law's theory of minorities to three hot button debates in the constitutional law realm: affirmative action (recently addressed by the Supreme Court in Grutter and Gratz), California's Racial Privacy Initiative (put to vote in 2003), and the demographic shift to a majority minority polity (already reality in California).

Keywords: corporate governance, shareholder wealth maximization, minority shareholders, affirmative action, majority minority

JEL Classification: L20, J7