Default Rules , Wealth Distribution , and Corporate Law Reform : Employment at Will versus Job Security
نویسنده
چکیده
In recent years, a number of commentators have criticized corporate law's traditional commitment to shareholder primacy because of the costs it imposes on nonshareholder corporate constituencies. The phrase "shareholder primacy" refers to management's legal duty to pursue shareholder wealth maximization without regard for competing considerations. Despite the jarring social effects of the hostile takeover craze of the 1980s, shareholder primacy has weathered those storms and has managed to retain its status as corporate law's foundational principle.' Adherence to this norm can result in decisions that are harmful to various corporate constituencies, including workers, lenders, suppliers, and others involved with the corporation. For example, seeking to maintain or enhance corporate profits for shareholders may prompt management to lay off workers or close production facilities. Such decisions can cause disastrous consequences for those who lose their jobs, as well as further harmful ripple effects
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