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About

Overview

The American corporation is confronted by demands that it be fundamentally rethought. They can be boiled down to two questions: What benefits do corporations yield and what responsibilities do corporations have to society at large? The Working Group on Corporate Governance brings together scholars, industry practitioners, and policymakers to engage in constructive and open debate about the logical consistency, treatment of evidence, and policy implications of proposed reforms to the regulatory systems that impact corporations. It also generates and disseminates research investigating the optimal conditions that allow corporations to sustain their crucial role in contributing to American economic growth and innovation.


The shareholder primacy paradigm has been the compass that corporate boards have followed steadfastly in the U.S for more than five decades, a period that has coincided with tremendous rates of innovation and economic growth. Basically stated, the shareholder primacy paradigm says that the duty of the employees is to the owners of the corporation, and no one else. As long as labor, capital, and product markets are free, the social responsibilities of the corporation are taken into account endogenously.

This paradigm has received pushback over the past decade, with scrutiny leveled at the validity of its two foundational assumptions; the ideas that (i) employees have a duty only to shareholders, and that (ii) markets discipline firms.

Drawing from the fields of financial economics, the political economy of regulation, innovation economics, and survey research on public opinion, our initiative aims to bring reason and evidence to this debate to address a key question: are there, as a matter of theory and evidence, systems that might build upon and improve the shareholder primacy paradigm?

CO-DIRECTORS
Stephen Haber

Stephen Haber

Peter and Helen Bing Senior Fellow

Stephen Haber is the Peter and Helen Bing Senior Fellow at the Hoover Institution and the A.A. and Jeanne Welch Milligan Professor in the School of Humanities and Sciences at Stanford University. In addition, he is a professor of political science, professor of history, and professor of economics (by courtesy), as well as a senior fellow at the Stanford Institute for Economic Policy Research.

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David Larcker

David Larcker

Distinguished Visiting Fellow

David Larcker is the James Irvin Miller Professor of Accounting, Emeritus, and director of the Corporate Governance Research Initiative at the Stanford Graduate School of Business. He is senior faculty of the Arthur and Toni Rembe Rock Center for Corporate Governance at Stanford University.

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Amit Seru

Amit Seru

Senior Fellow

Amit Seru is a Senior Fellow at the Hoover Institution, the Steven and Roberta Denning Professor of Finance at the Stanford Graduate School of Business, a senior fellow at Stanford Institute for Economic Policy Research (SIEPR), and a Research Associate at the National Bureau of Economic Research (NBER). He was formerly a faculty member at the University of Chicago’s Booth School of Business.

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