How did Citizens United Affect Shareholder Rights?
Citizens United poses a policy question: should Congress protect shareholders from corporate managers’ spending corporate treasury funds on politics? Writing for the 5-4 majority, Justice Anthony M. Kennedy argued that shareholders do not need Congress to protect them from corporate political spending through campaign finance laws because they can protect themselves using corporate governance tools.[17] Although Justice Kennedy asserts this as a fact, there was an incomplete factual record before the Court. Perhaps with a full factual record, Justice Kennedy would have agreed that shareholder rights are sharply circumscribed under current state law. According to Justice Kennedy, the free flow of information empowers shareholders to protect their own interests. As he wrote, “[s]hareholder objections raised through the procedures of corporate democracy can be more effective today because modern technology makes disclosures rapid and informative.”[18] His vision, however, is not grounded
