Shareholder Primacy Norm Research Articles

A Multi-Criteria Assessment of Corporate Residual Claimants

Corporate law provides shareholders with key legal protections and rights – including voting and fiduciary duties – by virtue of their status as residual claimants of corporations. This status stems from the observation that shareholders are the parties who receive the residual profits of the corporation. This Article argues that this conventional view of residual claimancy is incomplete because it considers only one of the multiple criteria that should be relevant to the residual claimant analysis. The rationale behind residual claimant analysis is that it seeks to identify the party whose interests are aligned with the corporation’s collective interest, and collective interest should be understood to include not only shareholder profit but also other stakeholders’ interests. And indeed, a review of the history and development of residual claimant theory shows that the residual claimant theory originally contemplated a broad array of stakeholders being the residual claimants of corporations. Depending on which of the theories of rent, interest, wages, or profit was adopted, each of landlord, capitalist, laborer, and entrepreneur have been considered to be the residual claimants of the corporation over time. It was only rather recently that residual claimant analysis hardened into the shareholder primacy norm in corporate law, bolstered by the ascendancy of a single-criterion approach to residual claimancy that focuses only on residual profit. Both the history and the rationale of residual claimant analysis support a more diverse conception of the residual claimant, which strives not only for profit maximization, but also for the other goals underlying the recognition of residual claims, including rewarding effective monitors, preserving firm-specific investments, and protecting undiversified risk bearers. In this Article, I offer a multi-criteria assessment of the residual claimant that seeks to address and balance these broader goals. While this recognition of multiple residual claimant interests will necessarily increase the complexity of the analysis, it is expected to bring the allocation of key legal protections and rights more into line with the recent trend towards incorporating a broader understanding of corporate purpose. Furthermore, as greater emphasis is placed not only on investment capital but also information capital as the driver of corporate value, a more diverse conception of the residual claim which recognizes not only shareholders’ capital investments, but also other stakeholders’ contributions, notably of data, is more aligned with how value is created and sustained in today’s society.

Capitalising On Capitalism: The Growing Business Case For Sustainability And The Crucial Role Of Shareholders

Even as humanity stares down the proverbial barrel of its own environmental ruin, its response to the existential threat of climate change appears sluggish at best. With 100 companies responsible for more than 70% of worldwide greenhouse gases since 1998, deliverance from environmental disaster appears heavily contingent on companies being able to significantly reduce their emissions. However, doing so is fraught with complexity. Scholars have decried modern day capitalism as suffering from a “systemic malaise”, seeing the deeply entrenched norm of shareholder primacy as the key barrier to the pursuit of greater environmental sustainability by companies. Yet, recent trends call for a review of this perception.

Organizational performance with a broader focus: The case for a stakeholder approach to leadership

In 2019, BlackRock CEO Larry Fink, Apple CEO Tim Cook, and the other 179 CEO members of the Business Roundtable argued that the purpose of a corporation must reflect not only the fiduciary interests of owners but also the varied interests of all stakeholders: employees, customers, partners, and broader society. This idea challenges a decades-old norm of shareholder primacy, so it is reasonable for organizational leaders to wonder whether doing so is truly in their firms’ best interests, and if so, how to implement this approach to leadership. To answer these questions, we draw on over 200 peer-reviewed articles covering leadership research to demonstrate how servant leadership, a stakeholder-focused approach to management, outperforms other leadership approaches across both shareholder and stakeholder criteria. We leverage case studies of organizational leaders from SAS, Zappos, Starbucks, and Jason’s Deli, financially successful organizations that exemplify how managers provide value and sustainability to stakeholders and shareholders through servant leadership. We also include practical steps managers can take to begin putting this form of leadership into practice.

Sustainable Value Creation Within Planetary Boundaries—Reforming Corporate Purpose and Duties of the Corporate Board

Business, and the dominant legal form of business, that is, the corporation, must be involved in the transition to sustainability, if we are to succeed in securing a safe and just space for humanity. The corporate board has a crucial role in determining the strategy and the direction of the corporation. However, currently, the function of the corporate board is constrained through the social norm of shareholder primacy, reinforced through the intermediary structures of capital markets. This article argues that an EU law reform is key to integrating sustainability into mainstream corporate governance, into the corporate purpose and the core duties of the corporate board, to change corporations from within. While previous attempts at harmonizing core corporate law at the EU level have failed, there are now several drivers for reform that may facilitate a change, including the EU Commission’s increased emphasis on sustainability. Drawing on this momentum, this article presents a proposal to reform corporate purpose and duties of the board, based on the results of the EU-funded research project, Sustainable Market Actors for Responsible Trade (SMART, 2016–2020).

Fighting Short-Termism in EU Company Law after the Financial Crisis

The authors challenge the belief that the shareholder model dominates EU company law, to the detriment of corporate sustainability. The article argues that the last financial crisis has significantly moved EU regulation towards integrating stakeholder model into EU company law. The article seeks to identify means that the EU has employed to fight shareholder primacy norm. The article considers safeguards underpinning the corporate financial sustainability, alongside those aspects of corporate social responsibility which focus on the interaction between a financially sustainable company and sustainable society. Shareholder model, stakeholder model, share capital, accounting standards, corporate social responsibility

A Proposal for Reform of EU Member States’ Corporate Governance Codes in Support of Sustainability

An overview of the European Union’s varying policies on the harmonisation of Member States’ company and securities laws dating back to the 1970s showcases the Commission’s averseness to deviate from the path dependence of the shareholder primacy norm and the existence of a series of policies that superficially afford attention to ‘stakeholders’ rights’, ‘sustainability’ and ‘corporate social responsibility’. The article seeks to demonstrate that the ‘greenwashing’ attempts it identifies in several of the Commission’s documents and legislative initiatives have given rise to problematic outcomes, one of which is the subsequent whitewashing of recent initiatives that aim to provide real support to sustainability concerns. The question the article sets out to answer is whether, at this stage in time, the main sociolegal challenges in the form of tensions that the Commission was faced with, in an attempt to address corporate governance at European level in a uniform manner, can now be resolved so as to better support sustainability. If so, what ‘softer’ options are available to the legislator to signal a renewed approach to corporate governance and a deviation from the path dependence shareholder primacy norm? The argument that the article puts forward is that in order to better complement the latest, more positive attempts, that aim to support corporations’ sustainable practices, a reform of European Union Member States’ Corporate Governance Codes to include a robust stakeholder friendly provision may well constitute one pragmatic way forward.

A Proposal for Reform of EU Member States’ Corporate Governance Codes in Support of Sustainability

An overview of the European Union’s varying policies on the harmonisation of Member States’ company and securities laws dating back to the 1970s showcases the Commission’s averseness to deviate from the path dependence of the shareholder primacy norm and the existence of a series of policies that superficially afford attention to ‘stakeholders’ rights’, ‘sustainability’ and ‘corporate social responsibility’. The article seeks to demonstrate that the ‘greenwashing’ attempts it identifies in several of the Commission’s documents and legislative initiatives have given rise to problematic outcomes, one of which is the subsequent whitewashing of recent initiatives that aim to provide real support to sustainability concerns. The question the article sets out to answer is whether, at this stage in time, the main sociolegal challenges in the form of tensions that the Commission was faced with, in an attempt to address corporate governance at European level in a uniform manner, can now be resolved so as to better support sustainability. If so, what ‘softer’ options are available to the legislator to signal a renewed approach to corporate governance and a deviation from the path dependence shareholder primacy norm? The argument that the article puts forward is that in order to better complement the latest, more positive attempts, that aim to support corporations’ sustainable practices, a reform of European Union Member States’ Corporate Governance Codes to include a robust stakeholder friendly provision may well constitute one pragmatic way forward.

Federalizing Bank Governance

Congress and federal financial regulators have long prioritized the safety and soundness of banking firms. But at the same time, the directors and officers of banking firms are legally bound to prioritize shareholder wealth maximization, which creates incentives for risk-taking that work against these regulatory goals. This shareholder primacy norm has long been a central feature of corporate governance, but as I describe in this Article its application to banks was not a deliberate policy choice but rather a historical accident. Indeed, banks possess several unique features that make shareholder wealth maximization an inapt governance priority for them. Banks are highly leveraged, which increases the importance of creditor agency costs. Banks also enjoy government guarantees, either explicit or implicit, on their short-term debt, and thus their governance is a matter of public concern. Finally, bank failures result in high negative externalities, and this also creates a strong public interest in bank safety and soundness. This Article argues that a new federal governance regime for banking institutions is appropriate and consistent with the historical purposes of banking regulations and charter oversight in the United States. Furthermore, such a regime would reduce the tensions between the law of state entities and the sprawling federal banking regulatory framework created by Congress, and harmonize the internal governance of banking firms with the broader goals of external banking regulations. Finally, I offer some thoughts on the key principles that should be present in any such federal governance regime for banking. For too long, we have tolerated a “cat-and-mouse” dynamic in banking, one in which regulators have sought to identify and address risky practices while knowing that the directors and officers of banking firms have strong incentives to take on higher risk. By changing this paradigm and realigning the incentives inherent in banking governance, we can take a major step towards ensuring long-term stability in our financial system.

Sustainable Value Creation Within Planetary Boundaries—Reforming Corporate Purpose and Duties of the Corporate Board

Business, and the dominant legal form of business, that is, the corporation, must be involved in the transition to sustainability, if we are to succeed in securing a safe and just space for humanity. The corporate board has a crucial role in determining the strategy and the direction of the corporation. However, currently, the function of the corporate board is constrained through the social norm of shareholder primacy, reinforced through the intermediary structures of capital markets. This article argues that an EU law reform is key to integrating sustainability into mainstream corporate governance, into the corporate purpose and the core duties of the corporate board, to change corporations from within. While previous attempts at harmonizing core corporate law at the EU level have failed, there are now several drivers for reform that may facilitate a change, including the EU Commission’s increased emphasis on sustainability. Drawing on this momentum, this article presents a proposal to reform corporate purpose and duties of the board, based on the results of the EU-funded research project, Sustainable Market Actors for Responsible Trade (SMART, 2016–2020). Keywords: corporate purpose; corporate boards; sustainability; due diligence; planetary boundaries; social foundation; climate change; human rights; EU company law; EU Green Deal; EU Sustainable Finance Initiative.

The EU’s Approach to Environmentally Sustainable Business: Can Disclosure Overcome the Failings of Shareholder Primacy?

Achieving sustainability requires that business not only complies with environmental law, but also that business goes beyond that which is expressly regulated by environmental law. This chapter examines regulatory approaches that seek to integrate environmental sustainability into the decision-making of business. In canvassing the EU’s main policy and legislative initiatives, we find strong reliance on various forms of disclosure, insufficient to mitigate the destructive social norm of shareholder primacy. This Anglo-American, law-and-economics inspired concept is not rooted in EU law, but has spread and gradually colonised the discretionary space that European company law gives corporate decision-makers to decide on how to best run the companies. The result is a prioritisation of short-term maximisation of shareholder returns. A fundamental shift towards coherent and more stringent regulation is needed to mitigate shareholder primacy and realise the potential of European business to contribute to sustainability.

Centros, California’s ‘Women on Boards’ Statute and the Scope of Regulatory Competition

In its 1999 Centros decision, the European Court of Justice affirmed that the EU right of establishment protects a corporation’s right to select a state of incorporation. Specifically, Centros rejected the argument that, under the real seat doctrine, the country in which the corporation’s head office is located may deny recognition or apply domestic corporate law to a corporation that is validly formed in another EU state. At the time, commentators broadly viewed Centros as opening the door to greater regulatory competition in Europe. Twenty years later, we examine Centros through the lens of SB 826—the California statute mandating a minimum number of women on boards. SB 826, like Centros, raises questions about the extent to which a forum state, as opposed to the state of incorporation, can impose its laws on corporations that operate within its borders. In the US, these questions are typically addressed by application of the internal affairs doctrine which provides that the law of the state of incorporation applies to the corporation’s internal affairs. Both SB 826 and Centros thus highlight the critical importance of the scope of the internal affairs doctrine. In this article, we stress the importance of the shareholder primacy norm to understanding the scope of US corporate law, which results in corporate law focusing primarily on matters of shareholder economic interest. We argue that the internal affairs doctrine should be understood within the context of the shareholder primacy norm and therefore directed to rules oriented to enhancing firm economic value. Considered in this context, SB 826 is distinctive in that it focuses on broader societal interests than traditional corporate law. In the same vein, EU corporate law has traditionally had a broader stakeholder orientation. We posit that the limited impact of the Centros decision, an impact which differed significantly from its predicted revolutionary effect, can be attributed to the greater focus of EU corporate law on social ordering and a more limited adherence to the shareholder primacy norm. Ironically, California’s adoption of SB 826 may portend a movement of the US towards Centros-style governance.

Clash of Norms: Shareholder Primacy vs. Sustainable Corporate Purpose

Shareholder primacy poses a fundamental challenge to sustainability. The maximization of returns to shareholders tends to externalize the negative environmental and social impacts of corporate activity, ensuring that social and environmental impacts remain on the margins of corporate concern, rather than as the defining limits of their activity. Yet, comparative research into company law has shown that mainstream legal-economic assumptions enshrining shareholder primacy as a legal purpose of the corporation are incorrect: shareholder primacy is a social norm, not a legal norm embedded in statute. This article explores the interaction of company law with social norms, notably shareholder primacy and sustainability, to develop a ‘regulatory ecology’ of corporate purpose. Building on the results of comparative company law research, we deploy a polycentric analysis of regulation, in which the regulatory power of law interacts with the regulatory power of markets, social norms and material constraints. We focus on the dominance of the shareholder primacy norm as fundamental obstacle to corporate sustainability, and consider the options for legal reform to place the legal purpose of the corporation on a socially and environmentally sustainable footing.

Beyond Climate Risk: Integrating Sustainability into the Duties of the Corporate Board

Finding out how business can be a part of the shift to sustainability has never been more crucial. This article starts out by presenting the results of a multi-jurisdictional comparative analysis of corporate law, seeking to investigate the barriers, to and possibilities for, sustainable business in the dominant business form — the corporation. The social norm of shareholder primacy is identified as a major barrier to sustainability. Shareholder primacy has taken over the space that corporate law leaves open for the discretion of the individual corporate board.

Discrimination as a Business Policy: The Misuse and Abuse of Corporate Social Responsibility Programs

This article examines legal issues associated with so-called “Corporate Responsibility Programs” (CSR), which promote the interests of third parties over those of a public company's shareholders. In many ways, the rise of CSR programs can be seen as a logical interim development to help boards of directors balance the need to respond to aggrieved constituencies, on the one hand, with the relative paucity of tools meant to deal with such issues available under corporation statutes, on the other hand. Those who promote CSR programs, however, have myriad agendas, some as benign as ensuring that companies are responsible for pollution emitted into local communities and others acting as a facade for political campaigns that punish targeted groups or entities. In the worst of cases, activists have used CSR programs as cover to promulgate discriminatory campaigns of racial and national origin discrimination. Beginning in 2010, in response to the rise of CSR programs, a number of American states formally addressed the need for a new corporate form that tempered shareholder primacy and elevated corporate stakeholder interests by creating a new statutory corporate form that allows shareholders to adopt non-financial objectives for the corporation (these entities are known as “Benefit Corporations”). A majority of American states now have some form of Benefit Corporation statute. The question of how an American corporation can adopt and abide by a CSR program containing guidelines that conflict with local and federal American laws is one that has received minimal scholarly attention to this point. This article will provide an overview of the shareholder primacy norm and competing theories of the corporation followed by a brief history of CSR programs in Europe and the United States. This article with then examine whether CSR programs are viable under state corporation law generally and specifically under Delaware corporation law, where many publicly traded corporations are incorporated and where a strong Benefit Corporation statute exists. Next, this article will examine how CSR programs have been used to compel corporations into adopting discriminatory policies and how those policies constitute violations of state and federal anti-discrimination laws, putting companies that adopt such CSR programs at risk of legal sanction. Finally, this article will examine the legal risks faced by a corporation that adopts a CSR program that incorporates unlawful discrimination.

Beyond Climate Risk. Integrating Sustainability into the Corporate Board

While the heat records and wildfires of 2018 brought climate change firmly into the spotlight, what we face is a convergence of environmental, social and economic crises. The grand challenge of our time is how to achieve social progress for all without destroying the very basis of our existence, with climate change being one of several such existential threats. Finding out how business can be a part of the shift to sustainability has never been more crucial. This article starts out with presenting the results of a multi-jurisdictional comparative analysis of corporate law seeking to investigate the barriers to and possibilities for sustainable business in the dominant form for doing business: the corporation. The social norm of shareholder primacy is identified as a main barrier. Shareholder primacy has taken over the space that corporate law leaves open for the discretion of the individual corporate board. Increasing warning signs concerning the financial consequences of climate change and of pressure on other planetary boundaries, as well as of social inequality across and within countries, may signal a change in the mainstream perception of the role of the corporation. The financial risks of ignoring the impacts of unsustainability have the potential for bringing sustainability full circle into the core of profit-seeking purpose of the corporation. Nevertheless, boards will need guidance on how to integrate sustainability into their decision-making. The article concludes with a brief presentation of a work-in-progress Sustainable Governance Model, which can be a starting point for businesses wishing to transition towards sustainability. It can also form the basis for a corporate law reform proposal, which is arguably a necessary step to shift business away from the unsustainable ‘business as usual’ and onto a sustainable path.

Shareholder Primacy vs. Stakeholder Theory: The Law as Constraint and Potential Enabler of Stakeholder Concerns

This chapter examines the Shareholder Primacy Norm (SPN) as a widely acknowledged impediment to corporate social responsibility (CSR), including how this relates to Stakeholder Theory. We start by explaining the SPN and then review its status under US and UK law and show that it is not a legal requirement, at least under the guise of shareholder value maximization. This is in contrast to the common assertion that managers are legally constrained from addressing CSR issues if doing so would be inconsistent with the economic interests of shareholders. Nonetheless, while the SPN might be muted as a legal norm, we show that it is certainly evident as a powerful social norm among managers and in business schools— reflective, in part, of the sole voting rights of shareholders on corporate boards and of the dominance of Shareholder Theory. We argue that this view of CSR is misguided, not least when associated with claims of a purported legally enforceable requirement to maximize shareholder value. We propose two ways by which the influence of the SPN among managers might be attenuated: extending voting rights to non-shareholder stakeholders or extending fiduciary duties of executives to non-shareholder stakeholders.

Dismantling the Legal Myth of Shareholder Primacy: The Corporation as a Sustainable Market Actor

The convergence of crises that we face as a global society, with its grand challenge of how to achieve social progress for all without destroying the very basis of our existence, emphasises the importance of discussing the role of the market actors. We cannot achieve environmental, social and economic sustainability of our societies without the contribution of the market actors (businesses, investors, consumers and the public sector in its many roles as market actor). With many difficult questions ahead, there is one thing we know for sure: the ‘business as usual’ path market actors in aggregate are on is not an option for sustainability; it is a very certain path towards a very uncertain future. A fundamental transition away from ‘business as usual’ and onto a sustainable path is necessary. Such a fundamental transition requires sustainable market actors. The paper focuses on what this means for business and more specifically, for the dominant business form of the corporation. In a time where social entrepreneurship in various shapes and sizes receives much (and undoubtedly warranted) attention, whether and how the dominant business form of the corporation fits into a sustainable future also needs to be discussed. This can be rephrased as a question of how to achieve corporate sustainability. The paper begins by discussing the role of the corporation in the unsustainable ‘business as usual’, based on the results of the Sustainable Companies Project (Section II), which shows that the main barrier to corporate sustainability is the social norm of shareholder primacy. This norm has become so dominant that it has turned into a legal myth, and corporate sustainability requires a dismantling of this myth. Section III presents a summary of the tentative reform proposal with this aim, while Section IV concludes with reflections on the work that needs to be done, where the mitigation of the legal myth of shareholder primacy is placed in the broader context of the ongoing research project Sustainable Market Actors for Responsible Trade (SMART).

Bridge Over Troubled Water: Corporate Law Reform for Life-Cycle Based Governance and Reporting

In spite of all the business initiatives using a sustainability language status quo remains very much unchanged: ‘business as usual’ continues, and is a very certain path towards a very uncertain future. The dire status as regards the convergence of environmental crises facing global society is encapsulated in the concept of ‘planetary boundaries’, first identified in the ground-breaking article by Rockstrom et al. in 2009, and updated and re-affirmed by Steffen et al. in 2015. Planetary boundaries define global sustainability criteria for critical environmental processes that regulate the stability of the life-support systems on Earth, defining nine parameters of the earth system to indicate a safe operating space for humanity. According to Steffen et al., human production and consumption is placing us in increasing or high risk in relation to at least four of the boundaries: climate change, biosphere integrity (genetic diversity, with uncertainty concerning the boundary for functional diversity), land system change, and biogeochemical cycles (phosphorus and nitrogen). The grand challenge of sustainability lies in securing the social foundation for humanity now and in the future, while staying within the planetary boundaries; in Kate Raworth’s words: achieving a safe and just operating space for humanity. Business contribution to meeting this grand challenge is vital. This paper concentrates on the contribution of the dominant legal form of business: the company. The paper first discusses why we are in this situation of corporate unsustainability: why has neither the mainstream corporate governance debate nor the more progressive CSR movement provided helpful answers? The answer lies in the perception of the nature of the company and of the role of regulation that informs these two alternative streams (Section 2), where the social norm of shareholder primacy dominates and where law, and notably company law, to a great extent has been ignored. This is also true of the business and human rights movement, although its innovative approach has the potential for contributing to breaking down barriers between social norms and law.The paper continues with discussing the role of the law, arguably the most powerful tool for society to implement the social norms that society on a high political level agree on: where and how has law failed in ensuring that companies create value in an environmentally, socially and economically sustainable way? That section concludes with an identification of the main barrier to sustainable business: the social norm of shareholder primacy that has taken over the discretionary space company law has given corporate decision makers, and the explanatory power of this recognition for the failure of the most favoured legislative tool for sustainability: reporting (Section 3). Legislative efforts at promoting sustainable business through reporting requirements risk continued failure because of the chasm between the perceived role and duty of the board and by extension management, and what boards and management are asked to report on.The recognition of the chasm between the perceived role and duty of the board and management, and the reporting requirements, helps identify a possible solution (Section 4). The research-based corporate law reform proposal presented here has the potential of being a ‘bridge over troubled water’, spanning this chasm and giving content to the new ‘non-financial’ reporting requirements of the EU. Section 5 concludes.

The Shareholder Primacy Norm

Corporate directors have a fiduciary duty to make decisions in the best interests of the shareholders. This aspect of fiduciary duty is often called the shareholder primacy norm. Legal scholars generally assume that the shareholder primacy norm is a major factor considered by boards of directors of publicly traded corporations in making ordinary business decisions and that changing the shareholder primacy norm would have an effect on the substance of those decisions. This Article challenges this view and argues that the shareholder primacy norm was never equipped to mediate conflicts between shareholders and nonshareholder constituencies of a corporation. The origins and development of the shareholder primacy norm suggest that it was introduced into corporate law to perform a much different and somewhat surprising function: the shareholder primacy norm was first used by courts to resolve disputes among majority and minority shareholders, and over time this use of the shareholder primacy norm evolved into the modern doctrine of minority oppression. This application of the shareholder primacy norm seems incongruous today because minority oppression cases involve conflicts among shareholders, not conflicts between shareholders and nonshareholders. Nevertheless, when early courts employed rules requiring directors to act in the interests of all shareholders (not just the majority shareholders), they were creating the shareholder primacy norm. Once used to resolve minority oppression cases, the shareholder primacy norm easily found its way into cases involving publicly traded corporations because courts did not routinely distinguish closely held corporations from publicly traded corporations until the middle of this century. But the application of the shareholder primacy norm to the ordinary business decisions of publicly traded corporations is muted by the business judgment rule. As a result, even though the shareholder primacy norm is closely associated with debates about the social responsibility of publicly traded corporations, it's impact on the ordinary business decisions of such corporations is extremely limited.

Opting Out of Shareholder Primacy: Is the Public Benefit Corporation Trivial?

The central command of corporate governance law is that directors must serve the shareholder interest. Directors may not sacrifice shareholder value in favor of other stakeholders or values. In this Article, I examine whether this rule is mandatory, or merely a default rule which can be altered through private ordering. I argue that Delaware’s corporate law, the most important corporate law in the United States, should be understood to have long-permitted deviation from shareholder primacy by charter specification. This conclusion, however, is at least complicated by the recent legislative creation of the Public Benefit Corporation (PBC). The PBC is a new form of business organization that explicitly charges directors with balancing the interests of shareholders and non-shareholders in corporate operations. The PBC innovation may lead judges to conclude that if corporate promoters want to deviate from shareholder primacy, they must do so by using the Public Benefit Corporation. The organizational and governance requirements of the PBC are highly particular, and most of its important features are mandatory. Thus, the Public Benefit Corporation may inadvertently have narrowed flexibility in the creation of corporations that alter the shareholder primacy norm, rather than expanded it, as the PBC’s proponents and many commentators have presumed.A more desirable interpretation, however, is that private-ordering of corporate beneficiary is still permitted under the Delaware General Corporation Law, and that the PBC is merely one alternative structure – a non-exclusive “menu option” – which promoters seeking alternatives to shareholder wealth maximization may find convenient to use. I urge judges to adopt this second interpretation, and I urge Delaware lawmakers to clarify their intentions to avoid jurists adopting the view that the PBC is the exclusive path to multi-stakeholder governance.