Regulating Corporate Governance in the Public Interest : The Case of Systemic Risk

There's long been a debate whether corporate governance law should require some duty to the public. The accepted wisdom is not to require such a duty — that corporate profit maximization provides jobs and other public benefits that exceed any harm. This is especially true, the argument goes, because imposing specific regulatory requirements and making certain actions illegal or tortious can mitigate the harm without unduly impairing corporate wealth production. Whether that is true in other contexts, this paper — delivered as the keynote address at the June 2016 National Business Law Scholars Conference at The University of Chicago Law School — questions if it's true in the context of systemic economic harm. The paper argues that corporate governance law should require some duty to the public in order to help mitigate that harm. Even if imperfect, such a duty represents an important step towards shaping corporate governance norms to begin to take the public into account