The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu The leading online blog in the fields of corporate governance and financial regulation. Wed, 22 Jul 2026 11:32:32 +0000 en-US hourly 1 https://wordpress.org/?v=6.5.8 https://corpgov.law.harvard.edu/wp-content/uploads/2024/02/cropped-photography-4-e1706898544564-1-32x32.png Reclaiming “Value” in the True Purpose of the Corporation – The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu 32 32 Reclaiming “Value” in the True Purpose of the Corporation https://corpgov.law.harvard.edu/2020/10/10/reclaiming-value-in-the-true-purpose-of-the-corporation/?utm_source=rss&utm_medium=rss&utm_campaign=reclaiming-value-in-the-true-purpose-of-the-corporation https://corpgov.law.harvard.edu/2020/10/10/reclaiming-value-in-the-true-purpose-of-the-corporation/#comments Sat, 10 Oct 2020 14:08:54 +0000 https://corpgov.law.harvard.edu/?p=133839?d=20201010100854EDT Posted by Martin Lipton and Kevin S. Schwartz, Wachtell, Lipton, Rosen & Katz, on Saturday, October 10, 2020
Editor's Note:

Martin Lipton is a founding partner specializing in mergers and acquisitions and matters affecting corporate policy and strategy, and Kevin S. Schwartz is a partner Wachtell, Lipton, Rosen & Katz. This post is based on their Wachtell Lipton memorandum. Related research from the Program on Corporate Governance includes The Illusory Promise of Stakeholder Governance by Lucian A. Bebchuk and Roberto Tallarita (discussed on the Forum here);  For Whom Corporate Leaders Bargain by Lucian A. Bebchuk, Kobi Kastiel, and Roberto Tallarita (discussed on the Forum here); and Toward Fair and Sustainable Capitalism by Leo E. Strine, Jr (discussed on the Forum here).

As corporate boards have increasingly embraced broad stakeholder governance and sustainable value creation in confronting today’s urgent environmental and social challenges, some critics have sown confusion by claiming that stakeholder governance stands at odds with a duty to promote shareholder value. Remarkably, some now even argue that those directors who view their fiduciary duty as owed to the corporation—to grow its value over the long-term using their business judgment, based on regular engagement with shareholders—run afoul of Delaware law’s purportedly exclusive solicitude for shareholder value, triggering loss of the business judgment rule’s protection. Delaware law says nothing of the sort, and directors must not let such warnings deter their full commitment to sustainable long-term growth, innovation, and corporate social responsibility.

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