In "An Alternative Paradigm to ‘On the Purpose of the Corporation’" Skadden challenges a recently proposed formulation of "corporate purpose" as inconsistent with directors' fiduciary duties under Delaware law such that their decision-making may lose the protection of the business judgment rule. The memo further explains how the traditional shareholder primacy governance model - albeit different - fairly accommodates directors' consideration of non-shareholder stakeholder interests, subject to acting in the best interests of shareholders as a whole.
See also "A Fuller Sense of Corporate Purpose: A Reply to Martin Lipton’s ‘on the Purpose of the Corporation’" (Oxford Law Faculty); our report below: "Corporate Purpose: Investors Speak"; last week's report: "Boston Partners Not Keen on BRT's 'Corporate Purpose'"; these prior reports: "Fiduciary Duty Basics," Business Roundtable: "Corporate Purpose" Color & Context," "ESG/CSR Decision-Making Framework for For-Profit Companies," and "Benefit Corporations: Explained & Timely Revisited"; and additional information & resources on our Director Duties & Liabilities page. This post first appeared in the weekly Society Alert!