Stakeholderism, Corporate Purpose, and Credible Commitment

*Presidential Professor, University of Pennsylvania Carey Law School. Special thanks to Elizabeth Pollman, Jill Fisch, Anita Allen, Dorothy Roberts, Tom Baker, Veronica Root Martinez, Usha Rodrigues, Kristin Johnson, Guy Charles, Gina-Gail Fletcher, Kevin Davis, Andrew Schwartz, and Shaun Ossei-Owusu for their comments and perspectives on earlier versions of this draft. All errors, of course, are mine.Show More

One of the most significant recent phenomena in corporate governance is the embrace, by some of the most influential actors in the corporate community, of the view that corporations should be focused on furthering the interests of all corporate stakeholders as well as the broader society. This stakeholder vision of corporate purpose is not new. Instead, it has emerged in cycles throughout corporate law history. However, for much of that history—including recent history—the consensus has been that stakeholderism has not achieved dominance or otherwise significantly influenced corporate behavior. That honor is reserved for the corporate purpose theory that focuses on shareholders and profit. Thus, many view the most recent embrace of stakeholderism as empty rhetoric. In light of this view, and the relatively fickle history of allegiance to stakeholderism, this Article seeks to explore whether we can expect that this most recent resurgence of stakeholderism will be different and hence whether we can expect that corporate actors will work to ensure that their corporations are governed in a way that benefits all stakeholders.

Relying on the theory of credible commitment—a theory focused on predicting whether economic actors will comply with their promises—this Article argues that there are considerable obstacles to achieving stakeholderism. This Article first argues that there are some reasons for optimism that this most recent embrace of stakeholderism will translate into reality. Second, and despite that optimism, this Article draws upon credible commitment theory to argue that it is unlikely that stakeholderism will have a lasting impact on corporate conduct unless corporations make a credible commitment to operating in a way that advances stakeholder interests and a broader social purpose. Third, this Article not only highlights the significant credible commitment challenges posed by efforts to pursue a stakeholder-related corporate purpose, but it also reveals significant concerns with the ability of prevailing reforms to overcome those challenges. Nevertheless, this Article argues that these concerns do not necessarily doom to failure the credible commitment effort. Instead, relying on the too often overlooked emphasis credible commitment theory places on norms, this Article insists that the collection of governance mechanisms aimed at achieving credible commitment, even if flawed, may facilitate norm internalization in a manner that increases the likelihood that corporate actors will align their behaviors with stakeholderism.

Introduction

One of the most significant recent phenomena in corporate governance is the outspoken embrace of the view that corporations should operate in a manner that benefits society and all of the corporations’ stakeholders.¹ 1.See, e.g., Elizabeth Pollman, The History and Revival of the Corporate Purpose Clause, 99 Tex. L. Rev 1423, 1447–51 (2021) [hereinafter Pollman, History and Revival]; Colin Mayer, Prosperity: Better Business Makes the Greater Good 5–7, 9 (2018) (proposing that corporations be legally required to articulate a purpose); Lucian A. Bebchuk & Roberto Tallarita, The Illusory Promise of Stakeholder Governance, 106 Cornell L. Rev. 91, 124–26 (2020) (discussing reactions reflecting belief that focus on social purpose represented a “significant turning point”); Ofer Eldar, Designing Business Forms to Pursue Social Goals, 106 Va. L. Rev. 937, 939 (2020) (discussing trends toward firms pursuing social goals); Jill E. Fisch & Steven Davidoff Solomon, Should Corporations Have a Purpose?, 99 Tex. L. Rev. 1309, 1309–11 (2021) [hereinafter Fisch & Solomon, Should Corporations Have a Purpose?]; Elizabeth Pollman, Corporate Social Responsibility, ESG and Compliance, in The Cambridge Handbook of Compliance 662, 662–63 (Benjamin van Rooij & D. Daniel Sokol eds., 2021).Show More This Article refers to this view of corporate purpose as stakeholderism.² 2.See infra note 146 (explaining other labels used to refer to stakeholder-centered view of corporate purpose).Show More This recent embrace of stakeholderism is best captured by two of the most influential actors in the business community. In 2018, Larry Fink, the Chief Executive Officer (“CEO”) of BlackRock, Inc. (“BlackRock”), the world’s largest shareholder and asset manager,³ 3.See The Rise of BlackRock, Economist (Dec. 5, 2013), https://www.economist.com/leader​s/2013/12/05/the-rise-of-blackrock [https://perma.cc/CVY2-R373]; Liam Kennedy, Top 500 Asset Managers 2021, IPE (June 2021), https://www.ipe.com/reports/top-500-asset-ma​nagers-2021/10053128.article [https://perma.cc/8M8U-3YTX] (identifying BlackRock, Vanguard, and State Street as three of the largest asset managers).Show More posted a letter to CEOs proclaiming that corporations had an obligation to make a “positive contribution to society.”⁴ 4.See Larry Fink, 2018 Letter to CEOs: A Sense of Purpose [hereinafter Fink, 2018 Letter], https://ww​w.blackrock.com/corporate/investor-relations/2018-larry-fink-ceo-letter [https://perma.cc/H​U35-78YS] (last visited Apr. 14, 2022).Show More Fink asserted that corporations should be operated with a view towards benefitting all stakeholders as well as the broader community.⁵ 5.See id.Show More In 2019, Fink reiterated these sentiments, proclaiming that corporations need to have purpose and that “[p]urpose is not the sole pursuit of profits but the animating force for achieving them.”⁶ 6.Larry Fink, 2019 Letter to CEOs: Purpose and Profit [hereinafter Fink, 2019 Letter], https://www.blackrock.com/corpora​te/investor-relations/2019-larry-fink-ceo-letter [https://perma.cc/Y3NB-JSA7] (last visited Apr. 14, 2022).Show More

Along these same lines, in 2019, the Business Roundtable, the nation’s leading nonprofit association of chief executives and directors, released a statement signed by 181 CEOs, expressing a commitment to embracing a corporate purpose that included a “fundamental commitment” to deliver value to all of the corporations’ stakeholders.⁷ 7.Business Roundtable Redefines the Purpose of a Corporation to Promote ‘An Economy that Serves All Americans,’ Bus. Roundtable (Aug. 19, 2019) [hereinafter Business Roundtable Statement], https://www.businessroundt​able.org/business-roundtable-redefines-the-purpose-of-a-corporation-to-promote-an-econom​y-that-serves-all-americans [https://perma.cc/XJS9-TTR4].Show More The Business Roundtable made clear that its statement was aimed at “[r]edefin[ing]” corporate purpose to promote “an economy that serves all Americans.”⁸ 8.Id.Show More A 2020 Fortune survey revealed that sixty-three percent of CEOs surveyed agreed with the Business Roundtable statement.⁹ 9.See Ira T. Kay, Chris Brindisi, Blaine Martin, Soren Meischeid & Gagan Singh, The Stakeholder Model and ESG: Assessing Readiness and Design Implications for Executive Incentive Metrics – A Conceptual Approach, PayGovernance (Sept. 1, 2020), https://w​ww.paygovernance.com/viewpoints/the-stakeholder-model-and-esg [https://perma.cc/K2JF-WAZZ]; Alan Murray & David Meyer, The Pandemic Widens Rifts; Businesses Need to Help Heal Them, Fortune (May 11, 2020), https://fortune.com/2020/05/11/coronavirus-pandemic-stakeholder-capitalism/ [https://perma.cc/53H3-P39R].Show More

There are certainly reasons to be skeptical about the potential impact of this statement. First, we have been here before.¹⁰ 10.See Leo E. Strine, Jr., Restoration: The Role Stakeholder Governance Must Play in Recreating a Fair and Sustainable American Economy: A Reply to Professor Rock, 76 Bus. Law. 397, 411–15 (2021) [hereinafter Strine, Restoration] (discussing origins of social purpose debate).Show More The concept of a corporate purpose focused on stakeholders and social purpose is far from new. As early as 1932, Columbia Law Professor Merrick Dodd insisted that the corporation must serve a community of interests, including employees, creditors, and the broader society, and that the corporation should behave in a socially responsible manner.¹¹ 11.See E. Merrick Dodd, Jr., For Whom Are Corporate Managers Trustees?, 45 Harv. L. Rev. 1145, 1147–48, 1161 (1932).Show More Moreover, throughout the history of corporate law, various scholars and corporate actors have advanced the view that corporations have an obligation to be socially responsible and serve the interests of all stakeholders impacted by the corporation’s activities, including shareholders, non-shareholders, and the broader community.¹² 12.See Lisa M. Fairfax, Doing Well While Doing Good: Reassessing the Scope of Directors’ Fiduciary Obligations in For-Profit Corporations with Non-Shareholder Beneficiaries, 59 Wash. & Lee L. Rev. 409, 432 (2002) [hereinafter Fairfax, Doing Well While Doing Good]; Lisa M. Fairfax, The Rhetoric of Corporate Law: The Impact of Stakeholder Rhetoric on Corporate Norms, 31 J. Corp. L. 675, 690–98 (2006) [hereinafter Fairfax, Rhetoric of Corporate Law] (noting proliferation of social purpose and social responsibility rhetoric in corporate documents and throughout the business community); Margaret M. Blair & Lynn A. Stout, A Team Production Theory of Corporate Law, 85 Va. L. Rev. 247, 280–81 (1999); William W. Bratton, The Economic Structure of the Post-Contractual Corporation, 87 Nw. U. L. Rev. 180, 208–15 (1992) (outlining the “entity theory” of corporation); Timothy L. Fort, The Corporation as Mediating Institution: An Efficacious Synthesis of Stakeholder Theory and Corporate Constituency Statutes, 73 Notre Dame L. Rev. 173, 184–86 (1997) (detailing stakeholder theory); C.A. Harwell Wells, The Cycles of Corporate Social Responsibility: An Historical Retrospective for the Twenty-First Century, 51 U. Kan. L. Rev. 77, 91–96 (2002) (discussing the debate on corporate social responsibility sparked by Dodd’s 1932 article).Show More Despite these periods, many scholars consistently and vehemently insist that “shareholder primacy,” which maintains that the corporation’s purpose is to maximize profits to its shareholders,¹³ 13.See Adolf A. Berle, Jr. & Gardiner C. Means, The Modern Corporation and Private Property 8–9 (1932); Milton Friedman, The Social Responsibility of Business Is to Increase Its Profits, N.Y. Times Mag., Sept. 13, 1970, at 32, 33, 126 (stating that corporate executives are employees of shareholders). For a discussion of more recent supporters of shareholder maximization, see, for example, Sanjai Bhagat & Glenn Hubbard, Should the Modern Corporation Maximize Shareholder Value?, AEI Econ. Perspectives, Sept. 1, 2020, at 1, 3–4 and Bebchuk & Tallarita, supra note 1, at 94–95. See also Fairfax, Doing Well While Doing Good, supra note 12, at 430–31 (discussing shareholder primacy theory); Edward B. Rock, For Whom is the Corporation Managed in 2020?: The Debate over Corporate Purpose, 76 Bus. Law. 363, 363–67, 375 (2021) [hereinafter Rock, For Whom is the Corporation Managed?] (detailing various perspectives on stakeholderism).Show More should serve as the primary guide for how corporate agents govern their corporation.¹⁴ 14.See Henry Hansmann, How Close is the End of History?, 31 J. Corp. L. 745, 746 (2006); Fairfax, Rhetoric of Corporate Law, supra note 12, at 690.Show More This includes scholars who believe that stakeholderism is more appropriate.¹⁵ 15.See Fairfax, Rhetoric of Corporate Law, supra note 12, at 682.Show More The very fact that we have been here before, and that scholars continue to dismiss stakeholderism, suggests reason for skepticism about whether the promises contained in stakeholderism will be realized. A second reason for skepticism is the fact that many corporations, including those who signed the Business Roundtable commitment, have a history related to socially responsible acts that is questionable at best.

This history, coupled with the historically fickle nature of the embrace of stakeholderism, begs an important question: Can we really expect that the most recent embrace of stakeholderism will translate into real change in corporate behavior? This Article answers that question by drawing on insights from the theory of credible commitment. The theory of credible commitment is an ideal lens through which to explore the viability of stakeholderism because it is aimed at exploring the extent to which individuals will honor the promises they make in an economic exchange.¹⁶ 16.See infra Part II (describing credible commitment theory).Show More

With credible commitment theory as a backdrop, this Article makes four important claims. This Article begins by acknowledging reasons to be skeptical about the impact of the most recent embrace of stakeholderism on corporate behavior. Nonetheless, this Article first contends that the type of corporate actors involved in this most recent embrace, coupled with socially conscious stakeholders’ growing ability to influence corporate reputation and bottom line through their use of twenty-first century public and social media platforms, may be influential enough to offer a genuine opportunity to turn the corner, thus setting the stage for corporations to genuinely make efforts to operate in a manner that advances the interests of all stakeholders.

Second, however, this Article argues that unless corporations make a credible commitment to ensuring that corporations will focus on other stakeholders, it is not likely that corporations will be able to seize this opportunity so that it translates into a genuine shift in corporate attitude and behavior, particularly in the medium and long-term. In advancing this argument, this Article draws from credible commitment theory to remind us that the realities of the economic environment along with the nature of economic promises mean that we cannot simply assume that corporations will be incentivized to adhere to their commitments, even if we assume they are acting in good faith when they make those commitments. In other words, this Article reminds us why corporate commitments have credibility problems.

Third, this Article not only argues that there are significant challenges to credible commitment in the context of stakeholderism but also questions whether available corporate governance mechanisms can overcome these challenges. In so doing, this Article sketches out a typology of factors necessary to facilitate credible commitment, and through the lens of this typology, demonstrates the manner in which prevailing credible commitment vehicles, even if reformed, may fall short of addressing those factors.

However, this Article argues that this demonstration does not doom credible commitment in this area to failure. To be sure, several prominent scholars have concluded that the kind of credible commitment flaws highlighted in this Article render efforts to actualize stakeholderism infeasible.¹⁷ 17.See Bebchuk & Tallarita, supra note 1, at 147; Rock, For Whom is the Corporation Managed?, supra note 13, at 391–95 (noting factors that complicate implementing a regime of stakeholder primacy); Dorothy S. Lund, Corporate Finance for Social Good, 121 Colum. L. Rev. 1617, 1619–21 (2021).Show More This Article rejects that conclusion. Instead, this Article argues that such a conclusion fails to account for the emphasis credible commitment theorists place on informal constraints in the form of norms and thus fails to account for the possibility that the cumulative effect of reforming foundational governance mechanisms may serve a very important normative function.¹⁸ 18.See infra Part IV.Show More This Article uses the term “norm” to refer to expectations regarding how individuals ought to behave.¹⁹ 19.For general discussion of the meaning of the term “norm,” see Cristina Bicchieri, Norms in the Wild: How to Diagnose, Measure and Change Social Norms 28–32 (2017) [hereinafter Bicchieri, Norms in the Wild]; Cristina Bicchieri, The Grammar of Society: The Nature and Dynamics of Social Norms 29 (2006) [hereinafter Bicchieri, The Grammar of Society]; Eric A. Posner, Law and Social Norms 5 (2000); Cass R. Sunstein, Social Norms and Social Rules, 96 Colum. L. Rev. 903, 914 (1996) [hereinafter Sunstein, Social Norms]; Robert D. Cooter, Decentralized Law for a Complex Economy: The Structural Approach to Adjudicating the New Law Merchant, 144 U. Pa. L. Rev. 1643, 1656–57 (1996).Show More Social science and empirical research reveal that norms can have a significant impact on behavior because individuals feel pressure to align their behavior with prevailing norms.²⁰ 20.See infra Section IV.B.Show More While external pressures such as those embedded in formal rules and legal constraints associated with corporate governance vehicles can ensure norm compliance, norms have the greatest chance of influencing behavior when they are internalized.²¹ 21.See infra Section IV.B.Show More This is because when norm internalization occurs, individuals comply with the norm irrespective of formal rules, legal enforcement, or other forms of external pressure.²² 22.See infra Section IV.B.Show More While the process of norm internalization is inexact, consistent and repeated exposure to norms, the credibility and legitimacy of normative sources, and the visibility of the norm can all contribute to the process of norm internalization.²³ 23.See infra Part IV.Show More Based on these insights, this Article argues that the collection of governance mechanisms aimed at achieving credible commitment, even if flawed, will be instrumental in facilitating norm internalization in a manner that increases the potential for corporate actors to align their behaviors with stakeholderism.

From this perspective, credible commitment theory suggests that while these reforms may not be an end, they may facilitate a means to an end. That is, their cumulative effect may be to increase the likelihood that individual corporate actors will believe that they ought to embrace stakeholderism, thereby increasing the likelihood that such actors will seek to engage in behaviors that align with such embrace—even or especially when external actors are not around to pressure them to do so.

Part I of this Article highlights the most recent embrace of stakeholderism and then articulates reasons for skepticism and optimism related to that embrace. Part II introduces the theory of credible commitment and demonstrates why credible commitment is necessary to actualize stakeholderism. Part II then draws upon credible commitment theory to advance a typology of factors that hinder credible commitment. Finally, Part II utilizes that typology to illustrate how the significant challenges associated with credible commitment apply to corporate behavior in general and to behavior focused on stakeholders in particular.

In light of this illustration, Part III begins by identifying the set of factors necessary for overcoming credible commitment challenges to stakeholderism. Part III concludes by surfacing several flaws with prevailing credible commitment reforms and pinpointing the difficulties with overcoming those flaws.

Despite this conclusion, Part IV redeems the collection of proffered reforms by demonstrating that they can play a role in facilitating credible commitment through increasing the potential for norm internalization, and thus opening a pathway for altering corporate behavior in favor of stakeholderism in a manner that does not rely on formal rules and constraints. Part IV then addresses important limitations and concerns associated with this norm internalization exercise. Part V concludes.

Credible commitment theory demonstrates that credible commitments are an essential component to any economic promise, thereby highlighting the importance of credible commitment to the promises embedded in stakeholderism. That theory also highlights the difficulty of credibly committing to stakeholderism and raises serious concerns about whether reforms can combat those difficulties. Viewed from this lens, credible commitment theory appears to confirm the skepticism with which many have greeted this new wave of stakeholder rhetoric. However, this Article concludes with a note of optimism. It is entirely possible that the collection of mechanisms aimed at reforming core aspects of our governance system can facilitate credible commitment by altering the normative expectations that guide corporate behavior, paving the way for corporations to make real on their promise to focus on all of their stakeholders.

1. See, e.g., Elizabeth Pollman, The History and Revival of the Corporate Purpose Clause, 99 Tex. L. Rev 1423, 1447–51 (2021) [hereinafter Pollman, History and Revival]; Colin Mayer, Prosperity: Better Business Makes the Greater Good 5–7, 9 (2018) (proposing that corporations be legally required to articulate a purpose); Lucian A. Bebchuk & Roberto Tallarita, The Illusory Promise of Stakeholder Governance, 106 Cornell L. Rev. 91, 124–26 (2020) (discussing reactions reflecting belief that focus on social purpose represented a “significant turning point”); Ofer Eldar, Designing Business Forms to Pursue Social Goals, 106 Va. L. Rev. 937, 939 (2020) (discussing trends toward firms pursuing social goals); Jill E. Fisch & Steven Davidoff Solomon, Should Corporations Have a Purpose?, 99 Tex. L. Rev. 1309, 1309–11 (2021) [hereinafter Fisch & Solomon, Should Corporations Have a Purpose?]; Elizabeth Pollman, Corporate Social Responsibility, ESG and Compliance, in The Cambridge Handbook of Compliance 662, 662–63 (Benjamin van Rooij & D. Daniel Sokol eds., 2021). ↑
2. See infra note 146 (explaining other labels used to refer to stakeholder-centered view of corporate purpose). ↑
3. See The Rise of BlackRock, Economist (Dec. 5, 2013), https://www.economist.com/leader​s/2013/12/05/the-rise-of-blackrock [https://perma.cc/CVY2-R373]; Liam Kennedy, Top 500 Asset Managers 2021, IPE (June 2021), https://www.ipe.com/reports/top-500-asset-ma​nagers-2021/10053128.article [https://perma.cc/8M8U-3YTX] (identifying BlackRock, Vanguard, and State Street as three of the largest asset managers). ↑
4.  See Larry Fink, 2018 Letter to CEOs: A Sense of Purpose [hereinafter Fink, 2018 Letter], https://ww​w.blackrock.com/corporate/investor-relations/2018-larry-fink-ceo-letter [https://perma.cc/H​U35-78YS] (last visited Apr. 14, 2022). ↑
5. See id. ↑
6.  Larry Fink, 2019 Letter to CEOs: Purpose and Profit [hereinafter Fink, 2019 Letter], https://www.blackrock.com/corpora​te/investor-relations/2019-larry-fink-ceo-letter [https://perma.cc/Y3NB-JSA7] (last visited Apr. 14, 2022). ↑
7. Business Roundtable Redefines the Purpose of a Corporation to Promote ‘An Economy that Serves All Americans,’ Bus. Roundtable (Aug. 19, 2019) [hereinafter Business Roundtable Statement], https://www.businessroundt​able.org/business-roundtable-redefines-the-purpose-of-a-corporation-to-promote-an-econom​y-that-serves-all-americans [https://perma.cc/XJS9-TTR4]. ↑
8. Id. ↑
9. See Ira T. Kay, Chris Brindisi, Blaine Martin, Soren Meischeid & Gagan Singh, The Stakeholder Model and ESG: Assessing Readiness and Design Implications for Executive Incentive Metrics – A Conceptual Approach, PayGovernance (Sept. 1, 2020), https://w​ww.paygovernance.com/viewpoints/the-stakeholder-model-and-esg [https://perma.cc/K2JF-WAZZ]; Alan Murray & David Meyer, The Pandemic Widens Rifts; Businesses Need to Help Heal Them, Fortune (May 11, 2020), https://fortune.com/2020/05/11/coronavirus-pandemic-stakeholder-capitalism/ [https://perma.cc/53H3-P39R]. ↑
10. See Leo E. Strine, Jr., Restoration: The Role Stakeholder Governance Must Play in Recreating a Fair and Sustainable American Economy: A Reply to Professor Rock, 76 Bus. Law. 397, 411–15 (2021) [hereinafter Strine, Restoration] (discussing origins of social purpose debate). ↑
11. See E. Merrick Dodd, Jr., For Whom Are Corporate Managers Trustees?, 45 Harv. L. Rev. 1145, 1147–48, 1161 (1932). ↑
12. See Lisa M. Fairfax, Doing Well While Doing Good: Reassessing the Scope of Directors’ Fiduciary Obligations in For-Profit Corporations with Non-Shareholder Beneficiaries, 59 Wash. & Lee L. Rev. 409, 432 (2002) [hereinafter Fairfax, Doing Well While Doing Good]; Lisa M. Fairfax, The Rhetoric of Corporate Law: The Impact of Stakeholder Rhetoric on Corporate Norms, 31 J. Corp. L. 675, 690–98 (2006) [hereinafter Fairfax, Rhetoric of Corporate Law] (noting proliferation of social purpose and social responsibility rhetoric in corporate documents and throughout the business community); Margaret M. Blair & Lynn A. Stout, A Team Production Theory of Corporate Law, 85 Va. L. Rev. 247, 280–81 (1999); William W. Bratton, The Economic Structure of the Post-Contractual Corporation, 87 Nw. U. L. Rev. 180, 208–15 (1992) (outlining the “entity theory” of corporation); Timothy L. Fort, The Corporation as Mediating Institution: An Efficacious Synthesis of Stakeholder Theory and Corporate Constituency Statutes, 73 Notre Dame L. Rev. 173, 184–86 (1997) (detailing stakeholder theory); C.A. Harwell Wells, The Cycles of Corporate Social Responsibility: An Historical Retrospective for the Twenty-First Century, 51 U. Kan. L. Rev. 77, 91–96 (2002) (discussing the debate on corporate social responsibility sparked by Dodd’s 1932 article). ↑
13. See Adolf A. Berle, Jr. & Gardiner C. Means, The Modern Corporation and Private Property 8–9 (1932); Milton Friedman, The Social Responsibility of Business Is to Increase Its Profits, N.Y. Times Mag., Sept. 13, 1970, at 32, 33, 126 (stating that corporate executives are employees of shareholders). For a discussion of more recent supporters of shareholder maximization, see, for example, Sanjai Bhagat & Glenn Hubbard, Should the Modern Corporation Maximize Shareholder Value?, AEI Econ. Perspectives, Sept. 1, 2020, at 1, 3–4 and Bebchuk & Tallarita, supra note 1, at 94–95. See also Fairfax, Doing Well While Doing Good, supra note 12, at 430–31 (discussing shareholder primacy theory); Edward B. Rock, For Whom is the Corporation Managed in 2020?: The Debate over Corporate Purpose, 76 Bus. Law. 363, 363–67, 375 (2021) [hereinafter Rock, For Whom is the Corporation Managed?] (detailing various perspectives on stakeholderism). ↑
14. See Henry Hansmann, How Close is the End of History?, 31 J. Corp. L. 745, 746 (2006); Fairfax, Rhetoric of Corporate Law, supra note 12, at 690. ↑
15. See Fairfax, Rhetoric of Corporate Law, supra note 12, at 682. ↑
16. See infra Part II (describing credible commitment theory). ↑
17. See Bebchuk & Tallarita, supra note 1, at 147; Rock, For Whom is the Corporation Managed?, supra note 13, at 391–95 (noting factors that complicate implementing a regime of stakeholder primacy); Dorothy S. Lund, Corporate Finance for Social Good, 121 Colum. L. Rev. 1617, 1619–21 (2021). ↑
18. See infra Part IV. ↑
19. For general discussion of the meaning of the term “norm,” see Cristina Bicchieri, Norms in the Wild: How to Diagnose, Measure and Change Social Norms 28–32 (2017) [hereinafter Bicchieri, Norms in the Wild]; Cristina Bicchieri, The Grammar of Society: The Nature and Dynamics of Social Norms 29 (2006) [hereinafter Bicchieri, The Grammar of Society]; Eric A. Posner, Law and Social Norms 5 (2000); Cass R. Sunstein, Social Norms and Social Rules, 96 Colum. L. Rev. 903, 914 (1996) [hereinafter Sunstein, Social Norms]; Robert D. Cooter, Decentralized Law for a Complex Economy: The Structural Approach to Adjudicating the New Law Merchant, 144 U. Pa. L. Rev. 1643, 1656–57 (1996). ↑
20. See infra Section IV.B. ↑
21. See infra Section IV.B. ↑
22. See infra Section IV.B. ↑

23. See infra Part IV. ↑