Federalist Society logo

The Shareholder and Stakeholder Symposium

September 24, 2021

The Federalist Society's In-House Counsel Working Group proudly presented the Shareholder and Stakeholder Symposium on Friday, September 24 at the Mayflower Hotel in Washington, DC.

 

---

The origins of the stakeholder theory of the corporation, now dominant among political and business leaders, which argues that a corporation should not be primarily run for shareholder benefit, but with equal attention to the employees, customers, suppliers, and the community in general, dates back to 1932 and a debate between E. Merrick Dodd of the Harvard Law School and Adolph Berle and Gardiner Means of Columbia Law School. Professor Dodd argued that because the corporation was a creature of the society that created it, the legal fiduciary duties of the company’s management and directors should run not only to the investors in the company, but also to the myriad stakes involved in its operation. The purpose of the business, Dodd held, should be societal benefit, not exclusively shareholder return.

Professors Berle and Means disagreed. They supported the traditional legal notion of shareholder primacy, where the fiduciary duties of the directors and officers are directed only to the shareholders. The goal of the business should, they argued, ultimately be long-term accretion in value to the investors—that was why they supplied the necessary capital to start the enterprise. The first part of this symposium will be devoted to a review of this famous debate and the costs and benefits of both theories of corporate purpose.

The theory sparked significant academic and popular debate on corporate purpose for almost one hundred years, with the popular view of corporate direction shifting back and forth, though the legal standard remained shareholder primacy and it seemed there was general agreement about the benefits of the shareholder theory.

With the rise of the large institutional investors, who traditionally supported shareholder primacy, and the advent of significant employee stock ownership, the debate is a bit more complicated than it was in 1932. As the current Administration and preeminent business leaders, including at the Business Roundtable, voice support for the stakeholder view, the debate appears no longer merely academic. The second panel will discuss this modern twist on the old debate and will include a discussion of the costs and benefits of both approaches and how the law itself should respond to this new effort to change the fundamental purpose of our corporate regulatory scheme.

 

Please direct questions about the event to pg@fed-soc.org and questions about CLE to cle@fed-soc.org.

Back to top
10:30 a.m. - 11:00 a.m.
Registration -- Foyer

The Shareholder and Stakeholder Symposium

Foyer
The Mayflower Hotel
1127 Connecticut Ave NW
Washington, DC 20036

Share

11:00 a.m. - 12:30 p.m.
Panel One: Reviewing the Berle-Dodd Debate

The Shareholder and Stakeholder Symposium

Topics: Corporations, Securities & Antitrust
East Room
The Mayflower Hotel
1127 Connecticut Ave NW
Washington, DC 20036

Share

Event Video

Description

A distinguished panel of scholars will review the famous debate in the pages of the Harvard Law Review between E. Merrick Dodd and Adolf Berle. Dodd challenged traditional notions of shareholder primacy theory, arguing that corporations had significant social responsibilities, while Berle defended shareholder primacy.

Featuring:

  • Prof. William Bratton, Nicholas F. Gallicchio Professor of Law Emeritus, University of Pennsylvania Carey Law School
  • Prof. Jill Fisch, Saul A. Fox Distinguished Professor of Business Law, University of Pennsylvania Carey Law School
  • Prof. Brett McDonnell, Dorsey & Whitney Chair in Law, University of Minnesota Law School
  • Prof. Yaron Nili, Associate Professor of Law and Smith-Rowe Faculty Fellow in Business Law, University of Wisconsin Law School
  • Moderator: Prof. Charles Elson, Edgar S. Woolard Jr. Chair in Corporate Governance and Professor of Finance, University of Delaware

* * * * * 

As always, the Federalist Society takes no position on particular legal or public policy issues; all expressions of opinion are those of the speaker.

Speakers

12:30 p.m. - 1:00 p.m.
Lunch -- Served Separately in State Room

The Shareholder and Stakeholder Symposium

State Room
The Mayflower Hotel
1127 Connecticut Ave NW
Washington, DC 20036

Share

Description

Lunch will be served separately in the State Room.

1:15 p.m. - 3:00 p.m.
Panel Two: The Shareholder and Stakeholder Views Today

The Shareholder and Stakeholder Symposium

Topics: Corporations, Securities & Antitrust
East Room
The Mayflower Hotel
1127 Connecticut Ave NW
Washington, DC 20036

Share

Event Video

Description

A panel of scholars and practitioners will offer their divergent views on what the shareholder and stakeholder theories mean (and should mean) today for businesses, corporate law and governance, the role of in-house attorneys, and more.

Featuring:

  • Prof. Charles Elson, Edgar S. Woolard Jr. Chair in Corporate Governance and Professor of Finance, University of Delaware
  • Ms. Holly Gregory, Partner and Co-Chair, Corporate Governance and Executive Compensation Practice, Sidley Austin
  • Hon. Myron Steele, Partner, Potter Anderson; former Chief Justice, Delaware Supreme Court
  • Mr. Paul Washington, Executive Director, ESG Center, The Conference Board; former Deputy General Counsel, TimeWarner
  • Moderator: Mr. Geoffrey Colvin, Senior Editor at Large, Fortune Magazine

 * * * * * 

As always, the Federalist Society takes no position on particular legal or public policy issues; all expressions of opinion are those of the speaker.

Speakers

Back to top