Index
NOTE: Page numbers containing an “n” indicate endnotes.
A
ABA (American Bar Association), reaction to constituency statutes, 138–139
ABA (American Bar Association) Corporate Laws Committee, 100
accountability, Delaware public benefit corporation statute, 96. See also MBCL (Model Benefit Corporate Legislation), accountability.
agency problem, 23, 225n Allen, William T., 23
Alliant International University, 67
altruistic concessionary investing, 46
amending articles of incorporation, 176
amendments, Delaware General Corporation Law, 195–196
Apollo Global Management, 67
appraisal rights corporate response to, 209
corporation’s obligations, 207–208
Delaware General Corporation Law, 195–196
Delaware public benefit corporation statute, 105–108
demanding appraisals, 208
filing a petition, 208
maintaining ownership, 208
perfecting, 208
shareholder voting, 208
when forming a new PBC, 203
articles of incorporation, amending, 176
B
B Lab
description, 2–3
drafting the MBCL, 65
legal counsel, 66–67
MBCL (Model Benefit Corporate Legislation), 2–3
balancing obligation, Delaware public benefit corporation statute, 87–91
Bartlett, Robert, 131–132
Barzuza, Michal, 145
Barzuza study of constituency statutes, 145
benefit corporation status, election/termination of, 172–173
benefit corporations. See also PBCs (public benefit corporations).
accountability. See MBCL (Model Benefit Corporate Legislation).
alternative entities. See LLCs (limited liability companies); social purpose corporations.
birth of, 65–68
Delaware entities. See PBCs (public benefit corporations).
laws vs. constituency statutes, 141–142
number of in the U.S., 9–10
opt-in statute, 3
publicly traded master limited partnerships, 221n
rules and principles, 1–2
vs. conventional corporations, 22
benefit corporations, extraordinary situations application of entire fairness, 121–122
change-in-control, 122–130
conflict transactions, 120–122
decisions affecting different classes differently, 131–132
defensive situations, 122–130
definition of “interest,” 120–121
enhanced scrutiny, 122–123
franchise rights, 130–131
proxy contests, 130–131
Revlon standard, 123–127
selling a benefit corporation, 123–127, 253n
benefit corporations, normal operations board composition, 118
business judgment rule, 109–113, 250n4
Delaware model, 111–112
establishing committees, 116
long-term view, 113–114, 250n13
management role, 116
MBCL model, 112–113
nonperiodic activity, 116–117
ordinary decisions, 111–113, 115–118, 250n5
periodic activity, 116–117
process issues, 117–118
rationalizing capital structure, 250n13
returning cash to shareholders, 250n13
taking on debt, 250n13
transparency, 115
benefit director, definition, 166
benefit enforcement proceedings definition, 166, 169–170
Benefit LLCs, 155. See also LLCs (limited liability companies).
benefit officer, definition, 166
Bertelsmann, 67
Bhopal tragedy, 47
Blair, Margaret, 24
Blasius Indus., Inc. v. Atlas Corp, 41–42
Blasius test, and constituency statutes, 145
board of directors. See directors and officers.
books and publications
Corporate Law and Economic Stagnation, 29
The Shareholder Value Myth, 4, 49–51
“The Social Responsibility of Business to Increase Its Profits,” 29
BP oil spill, 47
business judgment rule
argument against shareholder primacy model, 58
description, 36–39
MBCL remedies, 76–78
under normal operations, 109–113, 250n4
business judgments
directors and officers, MBCL requirements, 184
MBCL, accountability, 179
C
apitalism, responsible investing, 53–54
cash-out merger, 104
certificates of incorporation, Delaware General Corporation Law, 193–194
change-in-control, benefit corporations defensive situations, 127–130
enhanced business judgment rule, 40
enhanced security, 122–123
Revlon standard, 123–127
changing corporate purpose, Delaware public benefit corporation statute, 102–103, 247n60
charitable giving, legal citations, 31
citizen shareholders, in the investment chain, 13, 16
Clark, William, 66
coercive responses to hostile takeovers, 41
commitment
to stakeholders, responsible investing, 48–51
value of, 48–51
committees, establishing, 116
commons, preserving through responsible investing, 51–55
concessionary vs. non-concessionary investors, 45–46, 67–68
conflict transactions, 120–122
conflicts of interest among
directors and officers, 21
standards of review, 39
Connecticut, constituency statutes, 137
consideration of interests, MBCL accountability, 177–178
constituencies in conventional corporations, 30–31
constituency statutes ABA reaction to, 138–139
Barzuza study, 145
and the Blasius test, 145
Connecticut, 137
critique of, 140–141
definition, 135
Delaware, 138–139
enhanced scrutiny, 145
expanded interests for directors, 143–144
Geczy study, 142–147
Idaho, 137
legal citations, 144
litigation over, 142–146
MBCA (Model Business Corporation Act), 138
operation of, 136–138
opt-in, opt-out provisions, 138
reactions to, 138–142
shareholder primacy model, 28–29, 64–65
standing for non-stockholders, 146, 258n
voting rights, 144–145
vs. benefit corporation laws, 141–142
conventional corporations adopting
shareholder values, 149–152
corporate purpose. See shareholder primacy model; stakeholder model.
history of, 11–12
hostile takeovers, 29–31
importance of, 10–11
important elements of, 10
models of. See shareholder primacy model;
stakeholder model.
multiple constituencies, 30–31
rights of constituencies, 30–31
role of, 9–11
as sociopathic institutions, 4
status of stakeholders, 29–31
vs. benefit corporations, 22
conventional corporations, fiduciary duties basic rules of governance, 19–21
common shareholder primacy, 32–33
to creditors, 31–32
establishing directors and officers, 20
identifying stakeholders, 21–33
protecting idiosyncratic goals, 33–34
rights of shareholders, 20
coordination with other provisions of the law, MBCL accountability, 178–179
corporate law. See also Delaware General Corporation Law; Delaware public benefit corporation statute; governance; laws; legal citations; MBCL (Model Benefit Corporate Legislation); standards.
enforcing. See standards of review.
history of general incorporation statutes, 12
judicial review. See standards of review.
Corporate Law and Economic Stagnation, 29
corporate purpose, provisions of the MBCL, 71–75
corporate purposes. See MBCL (Model Benefit Corporate Legislation), corporate purposes.
corporations. See benefit corporations; conventional corporations; LLCs (limited liability companies); PBCs (public benefit corporations); publicly traded corporations.
Craigslist, 27–28
Credit Lyonnais Bank Nederland, N.V. v. Pathe
Commc’ns Corp., 132
creditors, fiduciary duties of conventional corporations, 31–32
D
debt, taking on to return cash to shareholders, 250n13
defending against hostile takeovers, 40–41
defending against unwanted acquisition, enhanced business judgment rule, 40–41
defensive situations, 122–130
Delaware. See also MBCL (Model Benefit Corporate Legislation).
center of corporate law, 1
constituency statutes, 138–139
Delaware General Corporation Law. See also Delaware public benefit corporation statute.
amendments, 195–196
appraisal rights, 195–196
certificates of incorporation, 193–194
duties of directors, 197
governing publicly traded corporations, 20
mergers, 195–196
notice of uncertified stock, 197
periodic statements, 198
public benefit corporation, definition, 193–194
scope of application, 193
stock certificates, 197
Subchapter XV, 193–199
third-party certification, 198
vote requirements, 195–196
Delaware model, normal operations, 111–112
Delaware public benefit corporation statute. See also Delaware General Corporation Law; MBCL (Model Benefit Corporate Legislation).
accountability, 96
appraisal rights, 105–108
balancing obligation, 87–91
changing corporate purpose, 102–103
conventional corporations adopting shareholder values, 149–152
description, 86–87
determining fair value of shares, 105–108
double derivative suits, 98, 247n
duties of directors, 92–99
effects on other corporations, 244n
interest balancing, 92–93
limits of personal liability, 96–98
managing toward the triple bottom line, 245n
materiality test, 89–90
mergers and acquisitions, 103–105
opting in or out of a public benefit corporation, 102–103
public benefit corporation reporting requirements, 99–100
public notice of PBC organization, 108
separate beneficiary of public benefit corporations, 94–96
shareholder derivative suits, 96, 98
specific public benefit, 90–91
statutory business judgment rule, 93–94, 246n
subsidiary public benefit corporations, 98
supermajority shareholder votes, 102–105, 247n60
sustainability reporting requirements, 100–102
transparency, 99–102
vs. MBCL (Model Benefit Corporate Legislation), 88
vs. model benefit corporation legislation, 88
Delaware Supreme Court, rights of constituencies, 30–31
derivative suits
Delaware General Corporation Law, 198
double derivative suits, Delaware public benefit corporation statute, 98, 247n
directors and officers
board composition, 118
conflicts of interest, 21
considering interests of non-shareholders. See constituency statutes.
Delaware General Corporation Law, 197
establishing, 20
expanded interests for directors, 143–144
fiduciary duties, 20
in the investment chain, roles of, 13
management roles, 116
objectives for, legal citations, 26–27
protecting idiosyncratic goals, 33–34
provisions of the MBCL, 68–69
directors and officers, duties of accountability, 96
under Delaware public benefit corporation statute, 92–99
double derivative suits, 98
interest balancing, 92–93
limits of personal liability, 96–98
managing toward the triple bottom line, 245n
separate beneficiary of public benefit corporations, 94–96
shareholder derivative suits, 96, 98, 247n
statutory business judgment rule, 93–94, 246n
subsidiary public benefit corporations, 98
directors and officers, MBCL requirements annual compliance statement, 181
business judgments, 184
change of, reporting, 189
coordination with other provisions of the law, 183
election, 181
exoneration from personal liability, 182–183
limitation on standing, 184
of professional corporations, 182
qualifications, 181
removal, 181
standard of conduct for directors, 177–178
status of actions, 182
dissenters’ rights. See appraisal rights.
documentation, mergers and acquisitions, 126–127
Dodd, Merrick, 22
Dodge v. Ford Motor Co., 22–23, 179–180
doing well by doing good, 47–48. See also responsible investing.
double derivative suits, 98, 247n
Drinkler Biddle & Reath LLP, 66–67
duties of directors and officers, 20, 21–22
eBay Domestic Holdings, Inc. v. Newmark, 27–29, 179–180
Eccles, Robert, 28–29
economic impact of constituency statutes, 147
election of directors and officers, MBCL requirements, 181
enhanced business judgment rule
changes in corporate control, 40
defending against unwanted acquisition, 40–41
definition, 39
Revlon standard, 40
Unocal standard, 40–41
enlightened self-interest, 46, 51–55. See also responsible investing.
enterprise model. See stakeholder model.
entire fairness standard, 39, 121–122
environmental and social concerns, provisions of the MBCL, 72–74
environmental investing. See responsible investing.
ex post vs. ex ante selves, 50–51
exclusivity, MBCL remedies, 76
exoneration from personal liability. See also LLCs (limited liability companies).
in a corporation charter, 206
Delaware public benefit corporation statute, 96–98
directors and officers, MBCL requirements, 182–183
MBCL, accountability, 179
externalities, 235n
ExxonMobil, on profits vs. serving political interests, 29
F
fiduciary claims, MBCL remedies, 76–78
fiduciary duties
of conventional corporations. See conventional corporations, fiduciary duties.
to creditors, legal citations, 31–32
five percent trigger on rights plans, 254n
401(k) plans, mutual funds, 13
franchise rights, 130–131
Friedman, Milton, 29
G
eczy, Christopher, 142–147
Geczy study of constituency statutes, 142–147
general public benefit, definition, 166, 170
general public benefit corporations, purpose of, 175
governance. See also laws; standards.
and investor styles, 46
shareholder primacy vs. stakeholder, 55
stakeholder provisions for PBCs, 217–219
summary by state, 156–157
governance, traditional corporations
adapting to benefit corporations. See benefit corporations, extraordinary situations; benefit corporations, normal operations.
basic rules of, 19–21
governance investing. See responsible investing.
H
Haskell Murray, 67
Hawley, James, 53
Hermes Investment Corporation, 5
hostile takeovers coercive responses to, 41
of conventional corporations, 29–31
defensive actions, 40–41
legal citations, 29–31
poison pills, 42
proxy contests, 42
human investors, in the investment chain, 15–17
I
Idaho, constituency statutes, 137
impact investing. See responsible investing.
In re I.E. Liquidation, Inc., 146
incorporation of benefit corporations, MBCL, 172
independent, definition, 166–167
integrated reporting. See responsible investing.
interest, definition, 120–121, 252n7
interest balancing, Delaware public benefit corporation statute, 92–93
intermediate business judgment rule. See enhanced business judgment rule.
International Integrated Reporting Council, 48
investment chain. See also responsible investing; responsible investors.
absence of societal responsibilities, 15–17
diagram of, 14
directors and officers, roles of, 13
iatrogenic effects on, 16
ignoring the human investors, 15–17
maximizing profit, 15–17
mutual funds, 13
savings through stock ownership, 13
shares in corporations, 13
structure of, 12–15
J
Jensen, Michael, 25
judicial review of performance. See standards of review.
K
Kloha v. Duda, 144
LL
ambrecht v. O’Neal, 99
Laureate Education, 47–48, 49, 67 laws. See also corporate law; Delaware General Corporation Law; Delaware public benefit corporation statute; governance; legal citations; MBCL (Model Benefit Corporate Legislation); standards.
enforcing. See standards of review.
history of general incorporation statutes, 12
LC Masterfund, 33
LEED (Leadership in Energy and Environmental Design), 117
legal citations
Blasius Indus., Inc. v. Atlas Corp, 41–42
charitable giving, 31
Credit Lyonnais Bank Nederland, N.V. v.
Pathe Commc’ns Corp., 132
defensive actions by corporations, 127–130
Dodge v. Ford Motor Co., 22–23, 179–180
double derivative suits, 99, 247n
eBay Domestic Holdings, Inc. v. Newmark, 27–29, 179–180
fiduciary duties to creditors, 31–32
five percent trigger on rights plans, 254n
hostile takeovers, 29–31
Kloha v. Duda, 144
Lambrecht v. O’Neal, 99
LC Masterfund, 33
objectives for directors and officers, 26–27
Official Comm. of Unsecured Creditors of
PHD, Inc. v. Bank One, 146
profits of shareholders vs. needs of stakeholders, 28–29
In re I.E. Liquidation, Inc., 146
regarding constituency statutes, 144
Revlon v. MacAndrews & Forbes Holdings, Inc., 26–29, 31–32, 40
Safety-Kleen Corp. v. Laidlaw Envtl. Servs.
Inc., 144
Schnell v. Chris Craft Industries, 41–42
shareholder entitlement to dividends, 22–23
shareholder primacy model, 28–29
shareholder voting rights, 41–42
shareholder wealth maximization, 27–29
Shepard v. Humke, 144
Theodora Holding Corp. v. Henderson, 31
Third Point, LLC v. Ruprecht, 128–130
Trados Inc. S’holder Litig., 33
Unocal v. Mesa Petroleum Corp, 29–31, 40–41
Versata Enters, Inc. v. Selectica, Inc., 254n
voting rights, 144–145
Warehime v. Warehime, 144–145
Yucaipa Am. All. Fund II, L.P. v. Riggio, 42
legislation. See Delaware public benefit corporation statute; legal citations; MBCL (Model Benefit Corporate Legislation).
liability, personal. See exoneration from personal liability; LLCs (limited liability companies).
Limited Liability Company Act. See LLC Act.
litigation over, constituency statutes, 142–146
LLC Act, 154–155
LLCs (limited liability companies), 155–156. See also Benefit LLCs; social purpose corporations.
birth of benefit corporations, 65–66, 239n
drawbacks to, 154
low-profit limited liability companies, 155
ordinary, 153–155
low-profit limited liability companies, 155
Lydenberg, Steve, 54
M
managing toward the triple bottom line, 245n
market crash of 2008, 53
Masouros, Pavlos E., 29
materiality test, Delaware public benefit corporation statute, 89–90
maximizing profit, in the investment chain, 15–17
MBCA (Model Business Corporation Act), 138
MBCL (Model Benefit Corporate Legislation). See also Delaware public benefit corporation statute.
adoption by Maryland, 66
annual benefit report, 81–82, 188–190
application and effect of, 164–165
critical goals, 70–71
definition, 2–3
directors and officers, 82
election of benefit corporation status, 172–173
eliminating shareholder primacy, 70–71
first state to adopt, 66
function of, 63
incorporation of benefit corporations, 172
need for, 64–65
normal operations, 112–113
number of, 67
opting in and out, 83
optional nature of, 64–65
stakeholder interests, 70–71
termination of benefit corporation status, 174–175
vs. Delaware public benefit corporation statute, 88
MBCL (Model Benefit Corporate Legislation), accountability business judgments, 179
consideration of interests, 177–178
coordination with other provisions of the law, 178–179
exoneration from personal liability, 179
limitation on standing, 179
standard of conduct for directors, 177–178
MBCL (Model Benefit Corporate Legislation), benefit directors annual compliance statement, 181
change of, reporting, 189
election, 181
exoneration from personal liability, 182
general rule, 181
of professional corporations, 182
qualifications, 181
removal, 181
status of actions, 182
MBCL (Model Benefit Corporate Legislation), corporate purposes
amending articles of incorporation, 176
amendment, 176
effect of, 175
general public benefit, 175
optional specific public benefit, 175
professional corporations, 176–177
MBCL (Model Benefit Corporate Legislation), definitions benefit corporation, 165, 169
benefit director, 166
benefit enforcement proceeding, 166, 169–170
benefit officer, 166
general public benefit, 166, 170
independent, 166–167
minimum status vote, 167, 170–171
specific public benefit, 168, 171
subsidiary, 168
third-party standard, 168–169, 171
MBCL (Model Benefit Corporate Legislation), provisions of
corporate purpose, 71–75
duties of directors, 68–69
environmental and social concerns, 72–74
general public benefits, 71–72
goal-oriented corporate purpose, 72
specific public benefits, 74–75
substantive claims, 78–81
third-party standards, definition, 72
MBCL (Model Benefit Corporate Legislation), remedies benefit enforcement proceeding, 75–76, 80
for breaching stakeholder governance mandate, 75–76
business judgment rule, 76–78
exclusivity, 76
fiduciary claims, 76–78
setting third-party standards, 79
substantive claims, 78–81
systems of assessment, 79–80
types of claims, 75–76
using third-party standards, 78–79
MBCL (Model Benefit Corporate Legislation), right of action
benefit ownership, 186–187
general rule, 186
standing, 186
MBCL (Model Benefit Corporate Legislation), standard conduct for officers
business judgments, 184
coordination with other provisions of the law, 183
exoneration from personal liability, 183
general rule, 183
limitation on standing, 184
McDonnell, Brett, 86
mergers and acquisitions. See also selling a benefit corporation.
cash-out merger, 104
Delaware public benefit corporation statute, 103–105
under Delaware public benefit corporation statute, 103–105
documentation, 126–127
Revlon scrutiny, 253n
stock-for-stock merger, 104
minimum status vote, definition, 167, 170–171
models of benefit corporations. See Delaware public benefit corporation statute; MBCL
(Model Benefit Corporate Legislation); shareholder primacy model; stakeholder model.
monitoring systems, responsible investing, 54–55
Monks, Robert, 53
monocapitalism, responsible investing, 53–54
MPT (modern portfolio theory), 46, 54
multicapitalism, responsible investing, 53–54
mutual funds, in the investment chain, 13
N
naming a company, Delaware public benefit corporation statute, 108, 203
nexus of contracts theory, 23
non-concessionary responsible companies, 47–51
non-concessionary vs. concessionary investors, 45–46
non-stockholders, standing for, 146
nonperiodic activity in benefit corporations, normal operations, 116–117
nonprimacy jurisdictions, argument against shareholder primacy model, 57–58
notice of uncertified stock, Delaware General Corporation Law, 197
O
officers. See directors and officers.
Official Comm. of Unsecured Creditors of PHD, Inc. v. Bank One, 146
opt-in opt-out provisions, constituency statutes, 138
opting in or out of a public benefit corporation, Delaware public benefit corporation statute, 102–103
optional specific public benefit corporations, purpose of, 175
ordinary decisions, 111–113, 250n5–250n6, 250n10
benefit corporations, normal operations, 115–118
ownership model. See shareholder primacy model.
ownership theory, 22–23
P
Patagonia, 67
PBCS (public benefit corporation statute). See Delaware public benefit corporation statute.
PBCs (public benefit corporations). See also benefit corporations.
charter provisions, 205–206
forming under Delaware statutes, 201–203, 211–215
laws governing. See Delaware public benefit corporation statute; MBCL (Model Benefit Corporate Legislation).
limits of liability, 206
purpose, 205–206
reporting requirements, 99–100
stakeholder governance provisions, 217–219
periodic activity in benefit corporations, normal operations, 116–117
personal liability. See exoneration from personal liability.
pharmaceutical industry, responsible investing, 54
philanthropy, as a force for good, 16
Plum Organics, 67
poison pills, 42
primacy model. See shareholder primacy model.
process issues in benefit corporations, normal operations, 117–118
professional corporation directors and officers, MBCL requirements, 182
professional corporations, purpose of, 176–177
public benefit corporations, definition, 193–194. See also PBCs (public benefit corporations).
public benefits of the MBCL general, 71–72
specific, 74–75
public notice of PBC organization, Delaware public benefit corporation statute, 108
publicly held entities, shareholder primacy model, 56
publicly traded corporations, governing law, 20
publicly traded master limited partnerships, 221n
purposeful companies, 46
Q
qualifications of directors and officers, MBCL requirements, 181
R
rationalizing capital structure, 250n13
removal of directors and officers, MBCL requirements, 181
reporting, sustainability. See responsible investing.
reporting metrics, responsible investing, 48
reporting requirements for public benefit corporations, Delaware public benefit corporation statute, 99–100
reports
annual compliance statement, 181
audit requirements, 189
of change of directors, 189
reports, annual benefit report audit requirements, 189
availability, 190–191
availability of copies, 190
change of benefit directory, 189
contents, 188–189
filing, 190–191
Internet website posting, 190
preparing, 188–190
timing of, 190
responsible investing
altruistic concessionary investing, 46
capitalism, 53–54
commitment to stakeholders, 48–51
creating value over the long term, 47–48
definition, 44
doing well by doing good, 47–48
enlightened self-interest, 46, 51–55
market crash of 2008, 53
monocapitalism, 53–54
MPT (modern portfolio theory), 46, 54
multicapitalism, 53–54
non-concessionary responsible companies, 47–51
pharmaceutical industry, 54
preserving the commons, 51–55
reporting metrics, 48
risk mitigation, 47
shareholder primacy, 55–60
value of commitment, 48–51
responsible investors
concessionary vs. non-concessionary, 45–46
ex post vs. ex ante selves, 50–51
investor styles and corporate governance, 46
monitoring systems, 54–55
purposeful companies, 46
universal ownership, 46, 51–55
returning cash to shareholders, 250n13
Revlon standard
mergers and acquisitions, 253n
sale of a benefit corporation, 123–127
Revlon v. MacAndrews & Forbes Holdings, Inc., 26–29, 31–32, 40
risk mitigation, responsible investing, 47
S
afety-Kleen Corp. v. Laidlaw Envtl. Servs. Inc., 144
savings through stock ownership, in the investment chain, 13
Schnell v. Chris Craft Industries, 41–42
selling a benefit corporation, 123–127, 253n. See also mergers and acquisitions.
separate beneficiary of public benefit corporations, Delaware public benefit corporation statute, 94–96
shareholder derivative suits, Delaware public benefit corporation statute, 96, 98, 247n
shareholder primacy model agency problem, 23
constituency statutes, 28–29
definition, 21
description, 22–24
eliminating. See MBCL (Model Benefit Corporate Legislation).
enforcing. See standards of review.
legal citations, 28–29
nexus of contracts theory, 23
ownership theory, 22–23
profits of shareholders vs. needs of stakeholders, 29
publicly held entities, 56
shareholder primacy vs. stakeholder governance, 55
in the U.S., 26–29
wasting scarce resources, 22–24
shareholder primacy model, arguments against business judgment rule, 58
negative impacts on society and the environment, 59–60
no clear standards, 58–59
no legal definition of shareholder primacy, 56–57
nonprimacy jurisdictions, 57–58
The Shareholder Value Myth, 4, 49–51
shareholders
general rights, 20
voting rights, 41–42
shareholders, legal citations entitlement to dividends, 22–23
wealth maximization, 27–29
shares
determining fair value of, 105–108
in the investment chain, 13
Shepard v. Humke, 144
social investing. See responsible investing.
social purpose corporations, 103, 155–156, 248n66
“The Social Responsibility of Business to Increase Its Profits,” 29
societal responsibilities, in the investment chain, 15–17
Sparks, A. Gilchrist III, 30
specific public benefit
Delaware public benefit corporation statute, 90–91
SRI (socially responsible investing). See responsible investing.
stakeholder governance
MBCL remedies for breaching, 75–76
provisions for PBCs, 217–219
summary by state, 156–157
stakeholder model
balancing stakeholder interests, 25–26
corporate obligation to the broad community, 24–26
critique of, 25–26
description, 22–26
social function of corporations, 24
stakeholders
identifying in conventional corporations, 21–33
status in conventional corporations, 29–31
standards of review
Blasius standard, 41–42
business judgment rule, 36–39
choosing a standard, 36
conflicts of interest, 39
entire fairness standard, 39
function of, 36
poison pills, 42
shareholder voting rights, 41–42
summary of, 37
standards of review, enhanced business judgment rule
changes in corporate control, 40
defending against unwanted acquisition, 40–41
definition, 39
Revlon standard, 40
Unocal standard, 40–41
standing
MBCL, right of action, 186
for non-stockholders, 146, 258n
standing, limitation on
directors and officers, MBCL requirements, 184
MBCL, accountability, 179
statutes. See constituency statutes; governance; laws.
statutory business judgment rule, Delaware public benefit corporation statute, 93–94, 246n
stock certificates, Delaware General Corporation Law, 197
stock-for-stock merger, 104
stocks
notice of uncertified, 197
savings through stock ownership, 13
stocks, publicly traded
saving for retirement, 13
U.S. value in 2017, 13
subsidiary, definition, 168
subsidiary public benefit corporations, Delaware public benefit corporation statute, 98
substantive claims, MBCL remedies, 78–81
supermajority shareholder votes, Delaware public benefit corporation statute, 102–105
Sustainability Accounting Standards Board, 48
sustainability reporting requirements, Delaware public benefit corporation statute, 100–102. See also responsible investing.
systems of assessment, MBCL remedies, 79–80
Thamotheram, Raj, 16
Theodora Holding Corp. v. Henderson, 31
third-party certification, Delaware General Corporation Law, 198
third-party standards
definition, 72, 168–169, 171, 241n
setting, 79
using, 78–79
Third Point, LLC v. Ruprecht, 128–130
Trados Inc. S’holder Litig., 33
transparency
benefit corporations, normal operations, 115
Delaware public benefit corporation statute, 99–102
Tucker, Anne, 16
U
universal ownership, responsible investors, 46, 51–55
Unocal v. Mesa Petroleum Corp, 29–31, 40–41, 127–130
V
value, creating over the long term, 47–48. See also responsible investing.
vote requirements, Delaware General Corporation Law, 195–196
voting rights
appraisal demands, 208
constituency statutes, 144–145
legal citations, 144–145
minimum status vote, 167, 170–171
standards of review, 41–42
supermajority shareholder votes, 247n60
W
Ward, Aidan, 16
Warehime v. Warehime, 144–145
wasting scarce resources, 22–24
Williams, Andrew, 53
Wood, David, 53
Y
Yosifon, David, 36–37
Yucaipa Am. All. Fund II, L.P. v. Riggio, 42