12 Pages Posted: 14 May 2007
Date Written: May 10, 2007
In his essay, Toward Common Sense and Common Ground?, Delaware Vice Chancellor Leo Strine seeks to identify common concerns of corporate management, labor, and shareholders. In so doing, Strine endorses a vision of the corporation as "a social institution that, albeit having the ultimate goal of producing profits for stockholders, also durably serves and exemplifies other societal values." Accordingly, he directs our attention to the prospects of creating "a corporate governance structure that better fosters [the corporation's stakeholders'] mutual interest in sustainable economic growth."
There is much that is admirable in Strine's analysis of what ails corporate governance and his proposals for reform, as well as much that is debatable. In this brief comment, I identify three aspects of Strine's analysis that strike me as underdeveloped. First, what do we mean when we call the corporation "a social institution"? Second, do managers and laborers really have common interests threatened by shareholders? Finally, even if Strine's search for common ground is a worthwhile project, is corporate law and governance the appropriate arena in which to find it? Taken together, these issues raise serious questions about the viability of Strine's project.
Keywords: corporation, corporate governance, management, labor, shareholders
JEL Classification: K22
Suggested Citation: Suggested Citation
Bainbridge, Stephen M., The Shared Interests of Managers and Labor in Corporate Governance: A Comment on Strine (May 10, 2007). UCLA School of Law Research Paper No. 07-15. Available at SSRN: https://ssrn.com/abstract=985683 or http://dx.doi.org/10.2139/ssrn.985683
By Fabio Zona