We interview Leo Strine on the purpose of the corporation, differentiating between shareholder primacy and stakeholder theory. We discuss ESG and the power of stockholders and workers. Leo Strine applies his perspective on corporate purpose to corporate acquisitions and lays out his hopes for the future of corporations.
Some critical articles to learn more about the shareholder primacy vs stakeholder theory debate:
Origins of the argument:
- Merrick Dodd, For Whom Are Corporate Managers Trustees?, 45 HARV. L. REV. 1145 (1932)
- Adolph A. Berle, Jr., For Whom Corporate Managers Are Trustees: A Note, 45 HARV.. L. REV. 1365, 1372 (1932)
Shareholder primacy ownership argument:
- Milton Friedman, A Friedman doctrine– The Social Responsibility of Business Is to Increase Its Profits, N.Y. Times, Sept. 13 1970.
Critique on shareholder primacy:
- Lynn A. Stout, Bad and Not-so-Bad Arguments for Shareholder Primacy, 75 S. CAL. L. REV. 1189 (2002).
Example of Application:
- Lucian Bebchuk and Roberto Tallarita, The Illusory Promise of Stakeholder Governance. 106 Corn. L. Rev. 91 (2020).
Example of Court Case Application:
- Revlon, Inc. v. MacAndrews & Forbes Holdings, Inc., 506 A.2d 173, 177 (Del. 1986)
A bit about Leo Strine:
Leo E. Strine, Jr., is Of Counsel in the Corporate Department at Wachtell, Lipton, Rosen & Katz. Prior to joining the firm, he was the Chief Justice of the Delaware Supreme Court from early 2014 through late 2019. Before becoming the Chief Justice, he served on the Delaware Court of Chancery as Chancellor since June 22, 2011, and as a Vice Chancellor since November 9, 1998.
In his judicial positions, Mr. Strine wrote hundreds of opinions in the areas of corporate law, contract law, trusts and estates, criminal law, administrative law, and constitutional law. Notably, he authored the lead decision in the Delaware Supreme Court case holding that Delaware’s death penalty statute was unconstitutional because it did not require the key findings necessary to impose a death sentence to be made by a unanimous jury.
For a generation, Mr. Strine taught various corporate law courses at the Harvard and University of Pennsylvania law schools, and now serves as the Michael L. Wachter Distinguished Fellow in Law and Policy at the University of Pennsylvania Carey Law School and a Senior Fellow of the Harvard Program on Corporate Governance. From 2006 to 2019, Mr. Strine served as the special judicial consultant to the ABA’s Committee on Corporate Laws. He also was the special judicial consultant to the ABA’s Committee on Mergers & Acquisitions from 2014 to 2019. He is a member of the American Law Institute.
Mr. Strine speaks and writes frequently on the subjects of corporate and public law, and particularly the impact of business on society, and his articles have been published in The University of Chicago Law Review, Columbia Law Review, Cornell Law Review, Duke Law Journal, Harvard Law Review, University of Pennsylvania Law Review, and Stanford Law Review, among others. On several occasions, his articles were selected as among the Best Corporate and Securities Articles of the year, based on the choices of law professors.
Before becoming a judge in 1998, Mr. Strine served as Counsel and Policy Director to Governor Thomas R. Carper, and had also worked as a corporate litigator at Skadden, Arps, Slate, Meagher & Flom from 1990 to 1992. He was law clerk to Judge Walter K. Stapleton of the U.S. Court of Appeals for the Third Circuit and Chief Judge John F. Gerry of the U.S. District Court for the District of New Jersey. Mr. Strine graduated magna cum laude from the University of Pennsylvania Law Sc
