Former Delaware Judge Leo Strine Headlines EEA Live Show on the Stakeholder Capitalism Controversy

Bring your questions to this unique opportunity to hear from Leo E. Strine Jr., former Delaware Chief Justice and an early advocate of Stakeholder Capitalism and Public Benefits Corporations, on Tue., Dec. 13 at 1 pm ET US. Register here. He will be joined by Larry Beeferman, a consultant and Fellow on Labor and Work Life at the Harvard Law School to discuss why Stakeholder Capitalism and Environmental, Social, Governance (ESG) have taken so much flack from the left and the right; the role of Public Benefits Corporation statutes, and a look at the future of Stakeholder Capitalism.

Larry Beeferman

Did you know that corporate law requires most corporations to focus on the needs of shareholders because they are the only ones authorized to vote on corporate matters? In other words, corporations are under legal threat from shareholders if it appears they are putting the interests of other stakeholders ahead of their own. This helps explain why early Stakeholder Capitalists such as creators of the B-Lab movement pushed for and achieved the creation of the Public Benefits Corporation (PBC) statutes in 2006, of which Leo E. Strine Jr., former Delaware Chief Justice, was an early proponent. For background, see ESM: Governance Expert Defines Stakeholder Capitalism and Its Implications.

Delaware enacted the Public Benefits Corporation statute in 2013 and has recently made it easier for companies to convert to PBC status. Thirty-five states and the District of Columbia now have similar statutes that support for-profit corporations that intend to produce a public benefit stated in its certificate of incorporation and to operate in a responsible and sustainable manner. Unlike a not-for-profit, these corporations can pay dividends to shareholders.

The PBC statutes raise the question: does a traditional corporation have to become a Public Benefits Corporation to protect itself from shareholder lawsuits if its stated purpose is to enhance returns for shareholders by addressing the needs of the customers, employees, supply chain and distribution partners, and communities?

This Enterprise Engagement Alliance YouTube Show on Dec. 13 at 1 pm ET US will feature a leading figure in the Stakeholder Capitalism movement, Leo E. Strine Jr., who ranks among the nation’s most experienced experts in corporate governance, especially as it relates to Stakeholder Capitalism principles and Public Benefits Corporations. He will be joined by Larry Beeferman, a consultant and Fellow on Labor and Work Life and the Harvard Law School to discuss the state of Stakeholder Capitalism and Environmental, Social, Governance (ESG).

Specifically, the panelists will discuss:

How could there be such a spirited debate about a subject with no formal dictionary definition?
What is the definition of Stakeholder Capitalism on long-standing usage as opposed to the definition created after the Business Roundtable proclamation about the need to address all stakeholders?
Why have the concepts of ESG (Environmental, Social, Governance) come under increasing attacks from the right and left?
Why should an “E” for Employees be added to the concept of ESG? Does a corporation have to become a B Corp. to include workers, customers, or other stakeholders on its boards or to embrace the principles in Strine’s 2019 whitepaper: Toward Fair and Sustainable Capitalism.
What is the difference between a Public Benefits Corporation and a traditional corporation? Does a company have to become a PBC to build worker voice and human rights into its business if it believes such practices are best for its business?
What are the rights of stakeholders other than shareholders in a standard corporation versus a Public Benefits Corporation?
Is the board of a standard corporation at risk if its stated purpose is to enhance returns for shareholders by creating value for employees, customers, supply chain and distribution partners, communities, and the environment? Does a company with such values have to convert to a PBS for protection against shareholder activists?
Likewise, under current corporate statutes, can corporations be sued by activist investors who believe the company is baking enormous waste into its business model because of customer and employee defections and who advocate for a greater investment in retention, etc.?
Do politics and business mix and/or when?
What is the state of Stakeholder thinking in the US and the world?

Questions are welcome and can be sent in advance to EEA program host Bruce Bolger at Bolger@TheEEA.org; 914-591-7600, ext. 230.

Strine currently serves as Of Counsel in the Corporate Department at one of the world’s leading corporate law firms Wachtell, Lipton, Rosen & Katz. Prior to that, he was the Chief Justice of the Delaware Supreme Court from early 2014 through late 2019. Before becoming the Chief Justice, he served on the Delaware Court of Chancery as Chancellor since June 22, 2011, and as a Vice Chancellor since Nov. 9. He was an early advocate for the creation of the Public Benefit Corporation statute in Delaware corporate law.

As a consultant and Harvard fellow, Beeferman’s focus is on addressing issues in the US and in other countries related to pension plan design, governance, and management, pension fund and institutional investor capital stewardship generally, with a special focus on human capital, labor, human rights, and infrastructure.

Register here for the live event on Dec. 13 at 1 pm ET US.

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