July 3, 2014 -- Professor Steve Bainbridge, as the 2014 Cameron Visiting Fellow at the University of Auckland Faculty of Law, gave a public lecture offering insights into law governing corporate entities in the US and New Zealand. His comments are cited in The Auckland Law News.
Professor Bainbridge commenced his talk by considering two key questions that arise in relation to any system of corporate governance – what are the ends which the entity seeks to pursue, and who is in charge?
In terms of the question of who is in charge, he suggested three ways in which control can operate. However, he says that neither of the first two approaches – “shareholder primacy” (where the ultimate objective is shareholder profit and shareholders decide how the company is run); and the “communitarian approach” (where the objective is not just the creation of wealth but also advancing the interests of all stakeholders) – are “normatively very appealing”, nor descriptive of the reality of US corporate law, where the third approach prevails, namely “director primacy”.
Read entire lecture coverage.