Topic

On (Corporate) Purpose

Abstract

Just over fifty years ago, Milton Friedman famously opined that the “social responsibility of business is to increase its profits.” Ten years ago, the first state enacted benefit corporation legislation to create a statutory alternative to the conventional, Friedmanesque model of corporate governance. These two anniversaries commemorate bold if opposite thinking on the purpose of the corporation: profits at all costs or profits in balance with people and the planet. Where does American corporate governance currently fit on a spectrum between these two views? And where is corporate law and practice headed, and what course corrections need be made?

Reflecting on corporate goals and obligations is also timely in that the urgent crises of economic inequality and climate change we now face are exacerbated if not caused by excessive profiteering. Some also theorize that the profit motives of media and social-media companies contribute to the current levels of political and social division, radicalizing users through algorithms that push extremism, disinformation, hate, and conspiracy theories. To the extent businesses are to blame for many our current problems, business law’s overemphasis on shareholder profits must share in that blame. Unless and until we reign in businesses’ dark tendencies, real solutions to these present crises will remain elusive.

Bio

Professor Judd Sneirson is an expert in corporate governance, sustainable business, and corporate social responsibility. He published the first and only law school coursebook on sustainability as it relates to business law and has been active in an international group of law professors working to make corporate sustainability a reality. His other scholarship has appeared in top law journals and in the Cambridge Handbook of Corporate Law, Corporate Governance, and Sustainability.

Professor Sneirson teaches business entities, common-law contracts, commercial law, a corporate sustainability seminar, and related courses. Prior to beginning his teaching career, Professor Sneirson was a law clerk in federal district court in New Jersey and a litigation associate at Willkie Farr & Gallagher in New York. He graduated from Williams College and the University of Pennsylvania Law School.

Profile

https://www.sulc.edu/page/judd-sneirson

Publications

https://papers.ssrn.com/sol3/cf_dev/AbsByAuth.cfm?per_id=432039