Does Congress Have the Authority to Act under the Commerce Clause?
Congress has the full authority to legislate in the corporate governance sphere of publicly traded companies using its Commerce Clause power. The recent experience with Sarbanes-Oxley proves this authority. Just as Sarbanes-Oxley regulated the independence of boards and other matters which were traditionally state-law matters and was not barred by federalism concerns, the legislative proposal articulated here would also not be barred. Legal commentators agree that Congress has broad powers to regulate corporate governance and any objections to “federalization” are purely normative. As Professor Stephen M. Bainbridge[69] notes: No one seriously doubts that Congress has the power under the Commerce Clause, especially as it is interpreted these days, to create a federal law of corporations if it chooses.[70] Or as Professor Robert B. Ahdieh[71] put it, “[n]o line of sufficient impermeability to categorically exclude any and all possible federal interventions into corporate law can be iden
