Friday, April 12, 2024

New Stuff From Me

Just posting the obligatory plug of a couple of new things.  First up, I reviewed Stephen Bainbridge's book, The Profit Motive: Defending Shareholder Value Maximization for the Harvard Law Review.  Here is the abstract:

Professor Stephen Bainbridge’s new book, The Profit Motive: Defending Shareholder Value Maximization, uses the Business Roundtable’s 2019 statement of corporate purpose as a jumping off point to offer a spirited defense of shareholder wealth maximization as the ultimate end of corporate governance. Beginning with an analysis of classroom standards like Dodge v. Ford Motor Co., and continuing through the modern era, Bainbridge argues both that shareholder value maximization is the legal obligation of corporate boards, and that it should in fact be so, partly because of wealth maximization’s prosocial tendencies, but also because of the lack of a viable alternative. Drawing on his decades of work as one of America’s most influential corporate governance theorists, Bainbridge offers up sharp critiques of the kind of enlightened managerialism reflected in the Business Roundtable’s statement, and advocated by academics like Professor Lynn Stout and practitioners like Martin Lipton. Along the way, he also has harsh words for trendy alternatives such as “environmental, social, and governance” (ESG) investing and proposals to reform the structure of the corporation itself.

In many ways, The Profit Motive is an essential resource for any theorist, or student, in this field. Deftly intertwining economic theory with sharp anecdotes and historical retrospectives, Bainbridge offers an entertaining account of the realpolitik of corporate functioning and the major legal developments that brought us to where we are today. However, as I argue in this book review, there are many facets to stakeholderism and the ESG movement, and the very features Bainbridge identifies as flaws could, in fact, turn out to be hidden virtues.

Second, last week, I spoke to students at College of the Holy Cross in Worcester, Massachusetts about ESG and the social responsibility of business.  The talk was somewhat similar to one I gave at Marquette Law School a few months ago, but this was the first time I had the opportunity to present to undergraduate students rather than law-type people.  Anyway, there's video:

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