Preview Thursday: Benefit Corporation Law and Governance: Pursuing Profit with Purpose

Lead Change Blog

I spent almost 30 years as a lawyer in private practice, advising business leaders on Delaware corporate law issues – addressing matters like preferred stock financings, IPOs, mergers, hostile takeovers, proxy contests, corporate governance and fiduciary issues. This paradigm is often called the “ shareholder primacy ” model, and it underlies our capital markets and business models.

Management Styles

Strategy Driven

Other important components of business (training, marketing, research, team building and productivity) were all accomplished according to goals, objectives and tactics. That’s my concern that financial-only focus without regard to other corporate dynamics bespeaks of hostile takeovers, ill-advised rollups and corporate raider activity in search of acquiring existing books of business.

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The Big Picture of Business – Corporate Cultures Reflect Business Progress and Growth.

Strategy Driven

Other important components of business (training, marketing, research, team building and productivity) were all accomplished according to goals, objectives and tactics. That’s my concern that financial-only focus without regard to other corporate dynamics bespeaks of hostile takeovers, ill-advised rollups and corporate raider activity in search of acquiring existing books of business.

A Short History of Golden Parachutes

Harvard Business

As I examined with my two co-authors, Mark Kennedy and Gerald Davis, in a 2012 research paper in the journal Organization Science, golden parachutes for top executives were created with very specific goals: to ensure shareholders wouldn’t lose out on beneficial M&A deals and to protect executives from the uncertainty of being fired in the wake of the corporate takeover wave of the 1980s. This was quickly followed by the era of hostile takeovers in the 1980s.

What's Lost When Shareholders Rule

Harvard Business Review

The form of capitalism that has emerged in Britain is the textbook description of how to organize capital markets and corporate sectors. It features dispersed shareholders with powers to elect directors and remove them with or without cause, large stock markets, active markets for corporate control , a good legal system, strong investor protection, a rigorous anti-trust authority — the list goes on.

Beware of Short-term Management, Not the Short-term Investor

Harvard Business Review

A low stock price can make the firm vulnerable to a hostile takeover, for example. It apparently takes a courageous and confident board member to second-guess the market! This blog post is part of the HBR Online Forum The CEO's Role in Fixing the System. Much has been made in recent years about the pernicious influence of short-term investors on corporate performance.

An Activist Investor Lands in Your Boardroom — Now What?

Harvard Business Review

But Motorola’s markets were transforming in the mid-2000s, and chief executive Greg Brown and his board decided in March 2008 that the company should be split in two: Motorola Mobility would take its mobile phones and related devices, and Motorola Solutions its mission-critical data and communication products. Founder and primary owner of Icahn Enterprises, Icahn had been tagged a corporate raider for his hostile takeover of TWA in 1985.