The New Corporate Political Governance

Abstract

Governance matters. The governance of our business and political institutions impacts all aspects of our lives. Our education, relationships, wealth, safety, dignity, health, and happiness are all affected by business and political governance decisions. Increasingly, corporate governance and political governance are evolving and intersecting, as corporations engage in some of the most contentious and important social challenges of our time with their voice, capital, and actions.

This Article provides one of the first comprehensive examinations of this new convergence of corporate and political governance and its wide-ranging effects on law, politics, business, and society. It begins by contextualizing the changing corporate political governance landscape. It investigates how new corporate social activism, the growth in ESG investments, the reemergence of retail investors, and a changing political calculus for businesses have all fostered this evolving landscape. Next, it discusses practical and legal fault lines in this landscape. In particular, it highlights how these tensions complicate larger debates about share- holders and stakeholders, meanings and metrics in management, as well as the limitations of private and public power. Finally, moving from causes and complications to consequences and correctives, this Article identifies implications of the new corporate political governance dynamic and recommends pragmatic next steps for scholars, executives, and policymakers. Specifically, it proposes a new corporate overstory for analyzing corporate sociopolitical engagements, offers new guiding principles to help firms focus their social efforts, and recommends workable models for policymakers engaging in business regulation and investment management. Ultimately, this Article aims to serve as an original, early roadmap and working compass for understanding and navigating the changing corporate political governance landscape.

Keywords: Corporate Governance, Stakeholder Governance, Political Governance, Sustainability, Corporate Social Activism, Corporate Activism, CEO Activism, Corporate Social Responsibility, CSR, Social Entrepreneurship, Impact Investing, ESG, Anti-ESG, DEI, Corporate Political Rights, Corporate Purpose