Jack Jacobs Quoted in Reuters News, "If corporations don’t put shareholders first, what happens to business judgment rule?"
(Reuters) - Marty Lipton’s inchoate feud with the Council of Institutional Investors may be the juiciest early story to emerge from the Business Roundtable’s announcement this week of a new corporate paradigm. But it’s not the only legal story prompted by the bombshell BRT announcement, in which business leaders pledged to consider the interests of an array of stakeholders – employees, customers, suppliers and community members – in addition to shareholders’ interest in maximizing profits.
Law firms are beginning to contemplate whether corporate boards will continue to be entitled to the deference afforded by the business judgment rule – which broadly shields directors from liability as long as they’re deemed to have acted in the corporation’s interest – if their decisions are prompted by rationales other than maximizing profits....