Stanford Law and the Corporate Social Voice

The recent controversy involving public speech at Stanford Law School suggests an appropriate, and pressing, topic to be addressed by the corporate social voice. Consistent with recent practice, corporations can serve their stakeholders by using the Stanford example to promote the civic importance of freedom of speech. In many ways, this would represent a logical, if somewhat unorthodox, extension of what BlackRock Chairman Larry Fink has described as the “inextricable link between purpose and profit”.

In today’s corporate social responsibility environment, many enterprises are reorienting strategies  to serve the interests of a broader set of stakeholders, especially in circumstances where government has seemingly been unable to provide solutions.  The last several years have seen companies publicly engaged with a variety of sensitive social and political issues ranging from gun control to LBGTQ and voting rights legislation to gender and racial equality to abortion rights.

Given the current state of public discourse, it would be consistent with that environment for companies to provide a public, and practical, reminder of the civil rights and liberties guaranteed to American citizens under the Bill of Rights, the first 10 Amendments to the Constitution.  The purpose would not be to promote a political view but to sharpen an appreciation for the uniqueness of American freedoms that would ultimately benefit all of a company’s stakeholders.

By now, the circumstances surrounding the Stanford Law incident have been well documented.  Judge Stuart K. Duncan of the U.S. Circuit Court of Appeals for the Fifth Circuit was invited by the student chapter of the Federalist Society to make an on-campus presentation on March 9.

The judge’s arrival on campus was met with boisterous protests by more than 100 students.  His presentation was disrupted by student heckling, taunts, and offensive engagement.  The appropriateness of his comments was publicly challenged by a law school administrator.  Ultimately Judge Duncan was escorted from the stage by his security detail, having been unable to deliver the observations he wanted to share.

In the wake of the incident, an administrator was placed on leave, and Stanford Law School Dean Jenny S. Martinez not only apologized to Judge Duncan, but also wrote a thoughtful 10-page, single spaced response to the law school community expressing her concerns and denouncing what she referred to as a “heckler’s veto.” Among the responsive steps announced in Dean Martinez’s letter was a mandatory half-day session in the spring quarter for all students on the topic of freedom of speech and the norms of the legal profession.

Let that sink in for a minute.  An entire student body of an elite law school is being required to attend an educational session on a foundational freedom and on improving constructive and inclusive discourse.  What is impressive (in every sense of the word) is not just that Dean Martinez had the courage to take such measures.  It is also that she felt compelled to do it.

For it’s short sighted to think that the conduct that confronted Judge Duncan is limited to the particular circumstances; i.e., an accomplished student body and a highly prominent law school.  The more important question is what it suggests about the broader public awareness of, and appreciation for, fundamental freedoms – especially among future leaders in Generation Y and Z.  And that’s where the corporate social voice comes into play.

Consider the now infamous challenge put to Judge Duncan by the law school administrator:  “Is the juice (what we are doing) worth the squeeze (the intended and unintended consequences and costs)?” The obvious implications of the administrator’s calculation are the regulation of speech and expression. One can imagine who is to measure “juice” and “squeeze” and by what standards.

As Dean Martinez noted, the suggestion that a speaker reconsider whether what they plan to say is worth saying raises the threat of coercion antithetical to accepted First Amendment principles.  For ultimately it’s not just freedom of speech that is at risk; the mindset that allowed this very public display of intolerance could very easily be extended to other First Amendment protections, e.g., religion, press, assembly, and protest.

Companies and their leadership should consider applying their social voice to encourage greater public discussion of the risks of intolerance and of the fragile nature of civil liberties.  Much like what Dean Martinez has proposed for Stanford Law, a corporate strategy could be a combination of public discussion, classroom review, and policies and procedures intended to protect the exercise of civil liberties within the workplace.

This discussion would not serve to condemn those who harassed Judge Duncan, or who would have done so had they had the opportunity.  Rather, it would serve to enhance awareness of the American democratic experience and the special, rare elements of its freedoms.

Moreover, it would seek to stop what Dean Martinez aptly described as “the cycle of degenerating discourse” in which we insist that people we disagree with must first behave the way we want them to.  This corporate social effort would be a public call to recognize, as Martinez put it, a “responsibility to treat each other with the dignity with which we expect to be met…to replace condemnation with curiosity, invective with inquiry.” A corporation’s attentiveness to these social undercurrents of the Stanford Law incident serves its best interests, for at least three reasons.

First, it would support the organization’s fundamental goal of training leaders by encouraging informed inquiry, decency in interactions, hospitality to a diverse perspectives, and, notably, respect for civic ritual.

Second, it would be consistent with the fiduciary duty to protect workforce culture as an asset of the corporation. This duty has long been promoted by the National Association of Corporate Directors and was recently endorsed by the Delaware Chancery Court in its decision in the McDonald’s Corporation shareholder derivative litigation:  “Employees perform the work that affects the value of the corporation.  To remain true to the fiduciary principle and build value over the long term, corporate fiduciaries must take care of the corporation’s workers.” Such care could include preserving a comfortable workplace atmosphere in which diverse points of view are allowed to be expressed, not stifled.

Third, a concentrated effort to de-escalate divisive discourse, and to encourage constructive movement toward common ground, will reduce the potential for social and political volatility that corporations loathe. The broader the public conversation about the basic freedoms of inquiry, thought, expression, publication, and peaceable assembly, the more likely they are to be respected in the 2024 election cycle. And the less likely it will be that political volatility damages the economy.

Such an exercise of the corporate voice would be both socially responsible and profitable, one likely to serve not only the company’s shareholders but also its employees, customers, and communities. It’s not exactly as Larry Fink envisioned it, but a social commitment with long term profitability focus nonetheless.

In his farewell address to the nation, President Reagan warned of an eradication of the American memory that could result, ultimately, in an erosion of the American spirit.  “We’ve got to do a better job of getting across that America is freedom – freedom of speech, freedom of religion, freedom of enterprise.  And freedom is special and rare.  It’s fragile; it needs protection.” How prescient.

SOURCES

Larry Fink’s 2019 Letter to CEOs: “Purpose and Profit” https://www.blackrock.com/corporate/investor-relations/2019-larry-fink-ceo-letter

“My Struggle Session at Stanford Law School”, Judge Stuart Kyle Duncan, The Wall Street Journal, March 23, 2023. My Struggle Session at Stanford Law School – WSJ

“Diversity and Free Speech Can Coexist at Stanford”, Tirien Steinbach, The Wall Street Journal, March 23, 2023. Diversity and Free Speech Can Coexist at Stanford – WSJ

Letter to Stanford Law School Community, March 23, 2023, Jenny S. Martinez, Richard E. Lang Professor of Law and Dean of Stanford Law School. SLS Letter from Dean (stanford.edu)

In re McDonald’s Corp. Stockholder Derivative Litigation, C.A. No. 2021-0324-JTL.

Farewell Address to the Nation, President Ronald Reagan, January 11, 1989. Microsoft Word – 01-11-89 Farewell Address to the Nation.doc (reaganfoundation.org)

This post comes to us from Michael W. Peregrine, a partner at McDermott Will & Emery LLP who advises corporations, officers, and directors on matters relating to corporate governance, fiduciary duties, and officer and director liability issues. His views do not necessarily reflect the views of the firm or its clients.