Paper Abstract
1078. Lucian Bebchuk & Roberto Tallarita, Will Corporations Deliver Value to All Stakeholders?, 05/2022; forthcoming in the Vanderbilt Law Review, Vol. 75 (2022).
Abstract: Amid growing concerns about the effects of corporations on stakeholders, supporters of stakeholder governance advocate relying on corporate leaders to use their discretion to protect stakeholders, and they seem to take corporate pledges to do so at face value. By contrast, critics question whether corporate leaders have incentives to protect stakeholders and to follow though such pledges. To investigate this issue empirically, we examine a wide array of corporate documents of the 128 U.S. public companies whose CEOs signed the Business Roundtable’s statement expressing a commitment to deliver value to all stakeholders. In particular, we analyze corporate governance guidelines, proxy statements, SEC submissions, corporate bylaws, and director compensation practices during the two years following the issuance of the Business Roundtable statement. Overall, our findings support the view that the statement was mostly for show and that signatory companies did not intend or expect it to bring about any material changes in how they treat stakeholders.