Proponents of stakeholder capitalism and ESG initiatives invariably claim that they are acting for the neutral, objective, bipartisan interests of everyone. Some weeks ago in these pages I considered why this is simply impossible, and attempted to demonstrate that whatever proponents may claim, the practical effect of stakeholder capitalism has been to allow corporate executives – at least until they are held accountable – to substitute their own personal policy preferences for their duties to shareholders simply by finding stakeholders who shared those preferences, and then claiming to act on behalf of all stakeholders based on that narrow set.
This isn’t the sort of thing that courts should have any trouble identifying as self-dealing behavior, when it is such. Corporate law provides a ready-built method for policing, at least to some degree, corporate executive self-dealing or incompetence. All that is required now is a modest extension of existing doctrine and precedent.
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