This class provides an introduction to the foundational policy debates in corporate law, as well as some of the fundamental economic concepts that inform those debates. The key feature of the public corporation is Adolph Berle and Gardiner Means’ insight concerning the separation of ownership and control: in many cases, the managers of the firm who run the business are not the owners. This separation creates organizational problems known as agency problems. As the readings will indicate, much of corporate law is directed at mitigating agency problems, including by incorporating internal governance mechanisms (such as the board of directors and shareholder voting), as well as by facilitating external governance mechanisms (such as the market for corporate control). We will explore these issues, as well as other perspectives in depth, and make them concrete with discussions of real world events and issues.
