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94 Iowa L. Rev. 987 (2008-2009)
Green is Good: Sustainability, Profitability, and a New Paradigm for Corporate Governance

handle is hein.journals/ilr94 and id is 993 raw text is: Green Is Good: Sustainability, Profitability, and a New Paradigm for Corporate Governance Judd F. Sneirson* ABSTRACT: This Article relates the concept of sustainability-that society must meet its present needs without infringing on future generations' ability to do the same-to corporate governance and seeks to reconcile any conflicts between the two. The largest of these conflicts is the commonly held view that companies must strive to maximize shareholder wealth and thus affirmatively neglect all other constituencies and considerations. The Article debunks this myth, both as a matter of law and as a function of social norms, market influences, and corporate-law theory. The Article then presents a new paradigm for corporate governance wherein companies voluntarily commit themselves to sustainable business practices. One of these new sustainable business models is the B Corporation certification that has garnered recent attention in the national business press. A second model hails from Oregon, where a newly enacted corporate-law provision encourages businesses to pledge to act sustainably. INTRO DU CTIO N ....................................................................................... 989 I. A SUSTAINABILITY PRIMER ...................................................................... 990 A. THE TPPLEBOTOMLINE ................................................................ 991 B . GEARING Up ..................................................................................... 993 II. SHAREHOLDER-WEALTH MAXIMIZATION ................................................ 995 A . L A W ................................................................................................. 995 1. Charters and Bylaws ................................................................ 996 2. Statutory Law ........................................................................... 997 3. D ecisional Law ....................................................................... 1000 Assistant Professor, University of Oregon School of Law. J.D., University of Pennsylvania; B.A., Williams College. I thank Rob Illig, Jim Kennedy, Dick Roy, and participants at a Pace Law School faculty colloquium for their helpful comments; Ben Attanasio, Katherine Bosch, and Brad Hill for valuable research assistance; and the University of Oregon School of Law for generous summer research support. 987

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