Corporate Friction: How Corporate Law Impedes American Progress and What to Do about It PDF
Preview Corporate Friction: How Corporate Law Impedes American Progress and What to Do about It
CORPORATE FRICTION Corporate law in the United States requires directors to managefirmsintheinterestsofshareholders,whichmeans neversacrificingprofitsinserviceofotherstakeholdersor interests.Inthistimely,groundbreakingbook,DavidYosi- fonarguesthatthisruleof“shareholderprimacy”islogic- ally, ethically, and practically unsound and should be replaced by a new standard that compels directors of our largest corporations to manage firms in a socially respon- sible way. In addition to summarizing existing debates on the issue – and giving special attention to the Supreme Court’s decision inCitizensUnited–Yosifon explores the problem of corporate patriotism and develops a novel approach to the relationship between corporate law and consumer culture. The book’s technical acumen will appeal to experts, while its engaging prose will satisfy anyoneinterestedinwhatourcorporatelawdoesandwhat itshoulddobetter. David Yosifon is a professor at Santa Clara University School of Law in Santa Clara, California. He teaches businesslawandlegalethics.HeisonthefacultyofSanta Clara University’s Markkula Center for Applied Ethics and is also a member of the Markkula Center’s Business Ethics Partnership. Yosifon’s scholarship on corporate governance and corporate social responsibility has appeared in numerous law journals, including the North Carolina Law Review, the Berkeley Business Law Journal, and the Delaware Journal of Corporate Law. His opinion pieces have appeared in the New York Times, the San FranciscoChronicle,andtheSanJoseMercuryNews. Published online by Cambridge University Press Published online by Cambridge University Press Corporate Friction HOW CORPORATE LAW IMPEDES AMERICAN PROGRESS AND WHAT TO DO ABOUT IT David Yosifon Santa Clara University School of Law Published online by Cambridge University Press UniversityPrintingHouse,CambridgeCB28BS,UnitedKingdom OneLibertyPlaza,20thFloor,NewYork,NY10006,USA 477WilliamstownRoad,PortMelbourne,VIC3207,Australia 314–321,3rdFloor,Plot3,SplendorForum,JasolaDistrictCentre,NewDelhi–110025,India 79AnsonRoad,#06–04/06,Singapore079906 CambridgeUniversityPressispartoftheUniversityofCambridge. ItfurtherstheUniversity’smissionbydisseminatingknowledgeinthepursuitof education,learning,andresearchatthehighestinternationallevelsofexcellence. www.cambridge.org Informationonthistitle:www.cambridge.org/9781107186408 DOI:10.1017/9781316890578 ©DavidYosifon2018 Thispublicationisincopyright.Subjecttostatutoryexception andtotheprovisionsofrelevantcollectivelicensingagreements, noreproductionofanypartmaytakeplacewithoutthewritten permissionofCambridgeUniversityPress. Firstpublished2018 PrintedintheUnitedStatesofAmericabySheridanBooks,Inc. AcataloguerecordforthispublicationisavailablefromtheBritishLibrary. LibraryofCongressCataloging-in-PublicationData Names:Yosifon,DavidG.,1973–author. Title:Corporatefriction:howcorporatelawimpedesAmericanprogressandwhattodo aboutit/DavidYosifon,SantaClaraLawSchool. Description:Cambridge,UnitedKingdom;NewYork,NY,USA:CambridgeUniversityPress, 2018.|Includesbibliographicalreferencesandindex. Identifiers:LCCN2017057521|ISBN9781107186408(Hardback)| ISBN9781316637173(Paperback) Subjects:LCSH:Corporationlaw–Politicalaspects–UnitedStates.|Corporationlaw–Economic aspects–UnitedStates.|Corporationlaw–Moralandethicalaspects–UnitedStates. Classification:LCCKF1414.Y672018|DDC346.73/066–dc23 LCrecordavailableathttps://lccn.loc.gov/2017057521 ISBN978-1-107-18640-8Hardback ISBN978-1-316-63717-3Paperback CambridgeUniversityPresshasnoresponsibilityforthepersistenceoraccuracy ofURLsforexternalorthird-partyinternetwebsitesreferredtointhispublication anddoesnotguaranteethatanycontentonsuchwebsitesis,orwillremain, accurateorappropriate. Published online by Cambridge University Press for Janice Published online by Cambridge University Press Published online by Cambridge University Press CONTENTS Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . page ix Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1 Apologies for Our System . . . . . . . . . . . . . . . . . . . 7 2 Critique of Shareholder Primacy . . . . . . . . . . . . . . . 17 3 The Citizens United Gambit in Corporate Theory . . . . . 41 4 The Actual Law of Corporate Purpose. . . . . . . . . . . . 60 5 Corporate Patriotism. . . . . . . . . . . . . . . . . . . . . . 96 6 Corporate Law and the Confusions of Consumer Culture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121 7 Foreign Models ofCorporate Governance. . . . . . . . . 146 8 A SociallyResponsible Corporate Governance Standard . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . 206 Index. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 211 vii Published online by Cambridge University Press Published online by Cambridge University Press ACKNOWLEDGEMENTS I want to thank my wife, Janice Kim Yosifon, and our children, Corianna Kim Yosifon and Joshua Kim Yosifon, for their love and inspiration. I want to thank my loving parents, Michael and Viola Yosifon. When we were growing up, your famous line was, “I will always buy you books.” This one is on me. I want to thank my brothers, Michael Yosifon, Jr., and Stephen Yosifon. I also want to thankJongandJungsuhKim,andEuniceandJimKim,mywonderful family by marriage. And Evan, Oliver, and Eleanor, my nephews and niece. I am blessed to have you all behind this book. I want to give special thanks to my great mentor and friend, Professor Jon Hanson of Harvard Law School. The ideas, techniques, and ethics he taught me are reflected on every page of this book. His generosity I am still striving to replicate. This book reports an intellectual journey that has been aided by countless friends and strangers. Many of the strangers (and some of the friends) are in the footnotes. Among the friends, I especially want tothankDonPolden,LisaKloppenberg,theHonorablePattiB.Saris, BradJoondeph,PratheepanGulasekaram,GaryNeustadter,Margaret Russell, Tseming Yang, Eric Wright, Kandis Scott, Nancy Wright, GeraldUelman,AdriannaDuffy-Horling,DorothyGlancy,Stephanie Wildman, Marina Hsieh, Allen Hammond, Ken Manaster, Colleen Chien,AlanScheflin,KirkHanson,JuneCarbone,DavidSloss,David Friedman, Kerry Macintosh, Stephen Diamond, David Ball, Cookie Ridolfi, Ellen Kreitzberg, Patty Rauch-Neustadter, William Wood- ward, Tyler Ochoa, Michelle Oberman, Kyle Graham, Anna Han, FatherPaulGoda,S.J.,GarySpitko,theRutgerscrew,RobertShank- lin, the late James Balassone, all my great teachers from the public schools of Vernon, New Jersey, Lyman Johnson, David Millon, Kent ix Published online by Cambridge University Press x Acknowledgements Greenfield, Faith Stevelman, David Westbrook, Stephen Bainbridge, Stefan Padfield, Yawu Miller, Melvin Miller, Joseph Mueller, James Livingston, John Gillis, Lloyd Gardner, Joseph Singer, Lani Guinier, Christine Desan, Scott Sandage, Peter Stearns, Joshua Idjadi, Janie Yoo,Heaven Chee, Alex Frischer,SarahVickers,and Corey Wallace. IamgratefultoMarySextonandEllenPlattfortheirskillfulassistance in obtaining research materials. All errors are mine alone. Published online by Cambridge University Press
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