Abstract
In August 2019, the Business Roundtable issued a new Statement on the Purpose of a Corporation. The statement, signed by 181 CEOs, including Doug McMillon of Walmart, declared that corporations should seek to serve the interests of all stakeholders—a marked departure from the Roundtable’s prior embrace of shareholder primacy. This shift in position reinvigorated debate among business and legal scholars about the proper purpose of a corporation.
 Using Walmart as a case study, this Note argues that corporations are indeed adopting a more flexible and responsive conception of corporate purpose. This Note begins with a discussion of corporate governance theories, detailing four distinct visions of corporate purpose and control. It then examines Walmart’s decisionmaking process regarding ammunition and firearm sales in the wake of a tragic mass shooting at one of its stores. Finally, it concludes by reconciling Walmart’s conduct with the prevailing theories of corporate governance, ultimately finding team production theory— which calls for the balancing stakeholder interests—to be most applicable.
Highlights
The statement, signed by 181 CEOs, including Doug McMillon of Walmart, declared that corporations should seek to serve the interests of all stakeholders—a marked departure from the Roundtable’s prior embrace of shareholder primacy
On September 3, 2019, Walmart chief executive Doug McMillon announced in an open letter to associates the company’s decision to discontinue sales of ammunition that could be used in handguns or military-style weapons.[1]
Corporate governance theories fall into two categories: theories holding that corporations should maximize shareholders’ pecuniary interests and theories holding that corporations should consider the interests of other stakeholders as well.[15]
Summary
On September 3, 2019, Walmart chief executive Doug McMillon announced in an open letter to associates the company’s decision to discontinue sales of ammunition that could be used in handguns or military-style weapons.[1]. The Roundtable’s shift has reinvigorated debate among business and legal scholars about corporate purpose.[9]
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