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76 Bus. Law. 397 (2020-2021)
Restoration: The Role Stakeholder Governance Must Play in Recreating a Fair and Sustainable American Economy: A Reply to Professor Rock

handle is hein.journals/busl76 and id is 429 raw text is: Restoration: The Role Stakeholder Governance Must
Play in Recreating a Fair and Sustainable American
A Reply to Professor Rock
By Leo E. Strine, Jr.
This reply to For Whom Is the Corporation Managed in 2020? The Debate Over Cor-
porate Purpose by Professor Edward Rock supports his depiction of the current state of
corporate law in the United States. But by contrast to Professor Rock, I do not trace the
debate over corporate purpose to recent statements by business elites belatedly recognizing
that our corporate governance system has failed to work for the many and is contributing
to growing inequality. Rather, I source the debate to the work of advocates and scholars
who have long been trying to restore fairness to our economy by updating an outdated
mid-twentieth century corporate governance system to address evolving market and polit-
ical developments. Taking a more positive view than Professor Rock, I argue that the most
promising corporate governance reform proposals do not involve a revolution, but a res-
toration. They build on traditional corporate law techniques and restore the balance
among stakeholders that characterized governance in the period when the U.S. economy
worked best.
In his excellent article, For Whom Is the Corporation Managed in 2020? The De-
bate Over Corporate Purpose, Professor Edward Rock articulates his understand-
ing of the current debate over corporate purpose and surfaces four separate, but
related, questions that he views as central to that debate:
First, what is the best theory of the legal form we call the corporation? Second, how
should academic finance understand the properties of the legal form when building
models or engaging in empirical research? Third, what are good management
* Ira M. Millstein Distinguished Senior Fellow at the Ira M. Millstein Center for Global Markets
and Corporate Governance at Columbia Law School; Michael L. Wachter Distinguished Fellow in
Law and Policy at the University of Pennsylvania Carey Law School; Senior Fellow, Harvard Program
on Corporate Governance; Henry Crown Fellow, Aspen Institute; Of Counsel, Wachtell Lipton
Rosen & Katz; former Chief Justice and Chancellor of the State of Delaware.
I am grateful for the excellent assistance of Jessica L. Allen and Peggy Pfeiffer, and helpful com-
ments from John Coates, Stephen Davis, Bruce Freed, Dorothy Lund, Elizabeth Pollman, and
David Webber.


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