Wednesday, June 25, 2014
For those of you needing a repreive from the breaking SCOTUS opinions this week and the rush to digest the latest in a string of controversial cases (and Hobby Lobby still hasn't come down), I come bearing gifts in the form of a classic: Margaret Blair & Lynn Stout's A Team Production Theory of Corporate Law.
I am home from a lovely conference at Seattle University School of Law's Adolf A. Berle Jr. Center on Corporations, Law & Society. The conference (Berle VI) focused on the team production theory as it was originally conceived, its role in scholarship over the last 15 years, and how it is an integral component of emerging scholarship. Most of us are familiar with the seminal paper and its conceptualization of the firm as creating situations where different stakeholders invest team-specific resources creating nonseparable gains that aren't easily addressed by contract. As most readers will know, Blair and Stout theorized that in this situation where various stakeholders make different types of investment (capital, human/labor, etc.) and where it is hard to tell what is earned from each separate contribution, that the stakeholders leave decisions up to the board of directors-- a mediating hierarchy--to apportion the gains and monitor the firm. Their view of the firm and the role of the board of directors, as theorized in this paper, served as a challenge to shareholder primacy as the dominant theory of corporate law. Of course, most academics cite to this paper in doctrinal articles when establishing the landscape of corporate law theories. If you haven't read the paper completely, or haven't read it in a while: do so. It will be time well spent.
If you aren't aware of the Berle Conferences, they are an incredible resource compiling established and emerging corporate law scholars on a variety of issues. Prior papers, speakers lists and other information regarding the Berle Center is available here. The team production theory papers will be published in a forthcoming issue of the Seattle University Law Review, and I will post an updated link.
Finally, for those of you still compiling a summer (or lifelong) reading list, I am adding Margaret Blair's 1995 book on corporate theory---Ownership & Control--which was the jumping off point for the team production theory and the catalyst behind two very successful corporate law scholars' careers.
Now you can go back to SCOTUS watch 2014.