Corporate Political Activity and Non-Shareholder Agency Costs

Abstract

The Supreme Court's controversial decision in Citizens United, much like its previous decision in Bellotti, was based in part on the notion that dissenting shareholders are sufficiently protected by state corporate law and the priority it accords to shareholder interests. There has been much debate in recent years over whether the Court's reasoning was sound. Absent from this conversation is any discussion of the interests of non-shareholders, such as employees and creditors, even as their importance to the corporation has become increasingly recognized in recent years.