Many thanks to Gordon for inviting me to guest blog here at Conglomerate. I've read Conglomerate since its inception. As a non-legal scholar, it has been a real education to me. We'll see if I learned anything as I now jump into the fire.
One of the legal debates that interests me the most is that of shareholder primacy. The shareholder primacy norm, as stated on paper, seems like a straightforward decision-making criterion. Corporate directors should make decisions that benefit the shareholders (and by benefit, we mean increase shareholder value). The norm seems to cut through the haze when directors begin discussing other ways to expend corporate resources. The norm is often used as a justification for actions or as a restraint on efforts like charitable giving, improving worker conditions, or doing things that might be seen as "socially responsible." Besides being straightforward, the norm is often thought of as universal and unquestioned. Stephen Bainbridge wrote that the shareholder primacy norm "has been fully internalized by American managers." My own experience with managers does not contradict this view (at least on the surface). In interviewing managers during the research phase of my dissertation on corporate acquisitions, several told me that the first question they asked themselves when deciding whether to pursue an acquisition was, "how does this increase our shareholders' value?"
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