A more nuanced view of the director's role.

• Author: Knowles, Marjorie Fine
• Position: The Shape of Things to Come - Corporate directors - Brief Article

FOR THE LAST SEVERAL DECADES, "shareholder primacy" has dominated in judicial opinions and academic writings as the key value to guide board decisionmaking. In practice, this has been translated into a singular focus on "shareholder value," which in turn has meant short-term stock price, with little concern for the ways in which corporations create value over the long term. Though there were some dissenting voices about whether this was a correct interpretation of the history of corporate law, it is clear that this view dominates at major academic institutions and among many judges, corporate law practitioners, and corporate managers.

The change in recent years has been a crescendo in the voices of dissent. Economists, legal scholars, leaders of institutional investors, labor leaders as well as city and state officials are proposing to return to more nuanced views of a director's roles and responsibilities. This shift is evident in calls from some members of the Delaware judiciary for a rethinking of that state's approach to fiduciary duty to shareholders; the new stakeholder analysis of the corporate structure; new academic enterprises such as the...