Stakeholder Capitalism as ESG-Constrained Shareholder Capitalism

Intense debates are alive and well on the nature and meaning of corporate purpose and corporate personhood. In a new paper, I analyze proposals by the U.S. Securities Exchange Commission to require that all reporting companies make periodic, mandatory Environmental, Social, and Governance (ESG) disclosures of comparable, standardized, and quantifiable metrics.

Shareholder capitalism leaves the protection of customers, employees, and other non-shareholder stakeholders to areas of law other than corporate law.  This delegation by shareholder capitalism is problematic because, as Tim Wu has written, it “ignores public choice theory and the obvious incentives of corporations who are told Read more