The conventional view of corporate governance is that it is a neutral set of processes and practices that govern how a company is managed.

We demonstrate that this view is profoundly mistaken: For public companies in the United States, corporate governance has become a “system” composed of an array of institutional players, with a powerful shareholderist orientation.

Our original account of this “corporate governance machine” generates insights about the past, present, and future of corporate governance. As for the past, we show how the concept of corporate governance developed alongside the shareholder primacy movement.

This relationship is reflected in the common refrain of “good governance” that pervades contemporary discourse and the maturation of corporate governance as an industry oriented toward serving shareholders and their interests.

As for the present, our analysis explains why the corporate social responsibility movement transformed into shareholder value–oriented environmental, social, and governance (ESG) standards, stakeholder capitalism became relegated to a new separate form of entity known as the benefit corporation, and public company boards of directors became homogenized across industries.

As for the future, our analysis suggests that absent a major paradigm shift that would force multiple institutional gatekeepers to switch their orientation, advocacy pushing corporations to consider the interests of employees, communities, and the environment will likely fail unless such effort is framed as advancing shareholder interests.

Speakers

Dorothy S. Lund, Associate Professor of Law, USC Gould School of Law, University of Southern California

Dorothy Lund’s research and teaching focuses on corporate law, corporate governance, securities regulation, contracts, and mergers and acquisitions. Her scholarship has appeared or is forthcoming in the Stanford Law Review, the Columbia Law Review, the University of Chicago Law Review, the Journal of Corporation Law, the Delaware Journal of Corporation Law and the Stanford Journal of Law, Business, and Finance. Her op-eds and other writing have appeared in The New York Times, The Atlantic and The Wall Street Journal. Lund received a JD from Harvard Law School, where she was an Olin Fellow in Law and Economics. She then clerked for Chief Justice Leo E. Strine Jr. of the Delaware Supreme Court and Judge Joel M. Flaum of the U.S. Court of Appeals for the Seventh Circuit. Before entering academia, Lund practiced corporate law at Sullivan & Cromwell LLP in New York.

@dorothy_s_lund

Commentator: Elizabeth Johnstone, Chair, Australian Securities Exchange Corporate Governance Council

Since 2017 Elizabeth Johnstone has been the Chair of the ASX Corporate Governance Council. (ASX CGC) Elizabeth was a previously a Partner and Practice Head Company Law and Governance, at an international legal firm, following an executive career in strategy and marketing. Over the past 25 years Elizabeth has served as a Chair and non executive director on a number of listed, private, government, regulatory and NFP boards.

Elizabeth served for many years on the American Bar Association’s International Corporate Governance Committee and was the Australian representative in the OECD’s inaugural Corporate Governance Committee. She has had been an invited speaker on corporate governance developments in a number of countries over the past twenty years.

The ASX CGC brings together 19 financial market participants, including peak business and professional groups, investor representatives, other stakeholders and advisors. It publishes the ASX CGC Corporate Governance Principles and Recommendations which all Australian publicly listed companies must respond to as part of their annual reporting.

Moderator: Professor Jennifer Hill, Bob Baxt AO Chair, Monash Law & Director of CLARS

Professor Jennifer Hill is the inaugural Bob Baxt AO Professor of Corporate and Commercial Law at Monash University Faculty of Law and is the Director of the Centre for Commercial Law and Regulatory Studies (CLARS). Jennifer is an internationally recognised legal scholar in the field of comparative corporate law and governance.

Jennifer is a graduate of the University of Sydney (BA LLB (Hons) and the University of Oxford (BCL). She is a research member of the European Corporate Governance Institute (ECGI) and has held visiting teaching and research positions at leading international institutions, including the University of Cambridge; Cornell University; Duke University; NYU Law School; University of Virginia, University of Texas, and Vanderbilt University Law School.

Contact us

Name: Janice Hugo

E-Mail: janice.hugo@monash.edu

Phone: 03 9905 3327