I was at the ABA Business Law Section Annual Meeting in Washington, DC last week. Among the lawyers in the Corporate Laws and Corporate Governance Committees, the chatter was all about corporate purpose and the Business Roundtable's new Statement. There was a lot of talk about the stakeholder model and whether it fits into the exiting laws that govern corporations, not only Delaware law, but also the laws of other states. Some states, like Pennsylvania, actually address the consideration of different stakeholder interests when boards make decisions through what are known as "constituency statutes." (Did you know that as of 2015, 34 states had constituency statues?) There is also the rapidly-developing area of public benefit corporations, or b-corps. But, how does the stakeholder theory impact how public company directors and officers carry out their fiduciary duties when stakeholder interests compete? That's the tricky part.
The discussion about corporate purpose at the meeting bled into discussions over the other hot topic: ESG. There was a lot of healthy debate how ESG factors can be measured and disclosed. One thing is clear: Whether you like it or not, ESG is and will be the immediate and future topic in corporate law and governance. Is it crazy to think there will be bodies of ESG law and CSR law? It's coming. Look at some of the proposed bills in Congress on ESG disclosure. The ABA has already formed a Corporate Social Responsibility Law Committee with a number of interesting subcommittees. The ABA also recently published a book titled The Lawyer’s Corporate Social Responsibility Deskbook: Practical Guidance for Corporate Counsel and Law Firms with a chapter on "ESG, Sustainability, and CSR: Governance and the Role of the Board" written by my friends, David Silk and Sabastian Niles, at Wachtell, Lipton, Rosen & Katz. These are all signs of what's to come.