On January 17, 2007, our ACS chapter welcomed Professors Kent Greenfield (Boston College Law School) and Gordon Smith (University of Wisconsin Law School), both of whom graduated from the Law School, to debate the progressive premises of Professor Greenfield's new book, "The Failure of Corporate Law."
Greenfield argues for an expanded view of corporate responsibilities and urges that companies should be accountable to a wider range of "stakeholders," not just those who hold shares in the company. This could allow us to avoid many of the negative externalities that corporations generate and that society at large must then shoulder. Professor Smith pushed back on this idea, arguing that imposing these kinds of obligations on corporations would be administratively impossible and would likely result in even greater externalities that we cannot yet predict.
The audience reacted enthusiastically to the debate and several students contributed excellent questions. One compared Greenfield's proposal to similar corporate governance requirements in Germany. Another questioned the equity of making corporations responsible for their negative externalities when society frequently fails to compensate them for their positive externalities. While some people appeared skeptical of Professor Greenfield's approach, many appreciated hearing arguments about corporate law that aren't typically heard at Chicago.