Can Law (and Professionalization) Fix “Minor” Problems of Externalization, Internalization, and Governance?
By: Steven A. Ramirez Much misconduct has been laid at the doorstep of the modern corporation, particularly in light of a historic surge in corporate corruption beginning in 2001. This Article focuses on what is right about the modern publicly held corporation and attempts to decouple these attributes from the debate about what needs to be fixed. It instead argues for a more austere restructuring that actually transcends the corporation per se and focuses on the apparent locus of the difficulties—the management of the large, publicly held business enterprise. The misdeeds commonly attributed to the corporation are hardly inherent to the corporation, or the inexorable result of exclusive attributes of the corporation. The essence of the modern corporation consists of two important elements: 1) limited liability and 2) the ability to lock-in capital regardless of the desires of individual owners or creditors. Combined with the shareholder primacy principle, these elements explain why soc
