Doing Well By Doing Good: Leveraging Due Care for Better, More Socially Responsible Corporate Decisionmaking

Corporate Governance Law Review, Vol. 3, p. 438, 2007

45 Pages Posted: 13 Mar 2007 Last revised: 30 Jul 2008

Date Written: October 3, 2007

Abstract

Corporate social responsibility is a good idea that is, unfortunately, dead. The debate about the proper role of corporations has been at an impasse since it began in the 1930s, and the current financial and political climate is such that any proposal seeking to impose social obligations on businesses is destined for failure. As a result, proponents of greater corporate social responsibility have had to content themselves with the current state of corporate law: that corporate fiduciaries may - but need not - consider the interests of constituencies other than shareholders in making company decisions.

This Article breaks this long-standing impasse. By leveraging the current fiduciary duty of care, and in particular its requirement that managers make decisions on reasonably full information, I argue that corporate decisionmakers must assess and consider the impacts of their decisions on all of the firm's constituencies. This procedural requirement, I argue, will produce decisions that are not only financially better for the firm, but are often more socially responsible, as well.

Keywords: corporations, corporate governance, corporate social responsibility

JEL Classification: K22, K32, L21, M14

Suggested Citation

Sneirson, Judd F., Doing Well By Doing Good: Leveraging Due Care for Better, More Socially Responsible Corporate Decisionmaking (October 3, 2007). Corporate Governance Law Review, Vol. 3, p. 438, 2007. Available at SSRN: https://ssrn.com/abstract=970359 or http://dx.doi.org/10.2139/ssrn.970359

Judd F. Sneirson (Contact Author)

Savannah Law School ( email )

7426 Hodgson Memorial Drive
Savannah, GA 31406
United States
912 525 3918 (Phone)

Register to save articles to
your library

Register

Paper statistics

Downloads
507
Abstract Views
1,928
rank
55,799
PlumX Metrics