Resources for introducing U.S. corporate law basics (Corporations “101”) in business and human rights courses include court cases (both state and federal), state and federal law and regulation, and corporate law commentary.
Court Cases (United States)
The following court cases are frequently taught to U.S. law students in a Business Associations class. These cases represent some of the most emblematic jurisprudence on the “black letter law” of corporations.
- Dodge v. Ford, 170 N.W. 668 (Mich. 1919).
Establishes, in dicta many have argued, the idea that the purpose of the corporation is to carry on business for the profit of shareholders.
- Basic Inc. v. Levinson, 485 U.S. 224 (1988).
Provides the jurisprudence underlying 10b-5 liability.
- Blue Chips Stamps et. al., v. Manor Drug Stores, 421 U.S. 723 (1975).
Holds that a 10b-5 violation must occur in connection with the purchase or sale of a security. A potential investor who failed to buy based on a corporate misstatement does not have standing to bring a claim.
- Francis v. United Jersey Bank, 432 A.2d 814 (N.J. 1981).
Holds that a director who fails to make a decision acts without due care.
- TSC Industries, Inc. v. Northway, Inc., 426 U.S. 438 (1976).
Defines the standard of materiality for 10b-5 cases in securities regulation.
- In re Walt Disney Co. Derivative Litigation, 907 A.2d 693 (Del. 2005).
Discusses the standard for bad faith under Delaware law, finding that gross negligence, without more, is not bad faith.
Corporate Law and Regulation
- Delaware General Corporations Law, Code Ann. tit. 8, § 102(b)(7)(allowing the elimination of personal liability for directors) (West 2011).
- U.S. Securities and Exchange Commission, Disclosure of Corporate Codes of Ethics, SEC Release No. 33-8177 (2003).
- United States Code, Foreign Corrupt Practices Act, 15 U.S.C. §§ 78dd-1, et seq.
- United States Code, Securities Act of 1933, 15 U.S.C. §77a.
- United States Code, Securities Exchange Act of 1934, 15 U.S.C. §78a.
- Securities Exchange Act of 1934, Definitions of terms (materiality), 17 CFR §230.405.
- Securities Exchange Act of 1934, Employment of manipulative and deceptive devices, 17 CFR§240.10b-5.
- Joel Bakan, The Corporation: The Pathological Pursuit of Power and Profit (Free Press, 2005).
- Archie B. Carroll, A History of Corporate Social Responsibility: Concepts and Practices, in Oxford Handbook of Corporate Social Responsibility, 19-46 (Andrew Crane et al., eds., 2008).
- Douglass Cassell, Outlining the Case for a Common Law Duty of Care of Business to Exercise Human Rights Due Diligence, Business and Human Rights Journal (Vol. 1:2, July 2016), available at: http://scholarship.law.nd.edu/cgi/viewcontent.cgi?article=2267&context=law_faculty_scholarship.
- Wesley Cragg, Human Rights, Globalisation and the Modern Stakeholder Corporation, in Tom Campbell & Seumas Miller, eds., Human Rights and the Moral Responsibilities of Corporate and Public Sector Organisations (2004) 105, 106-16.
- Janet Dine, The Governance Of Corporate Groups (Cambridge University Press, 2006).
- Einer Elhauge, Sacrificing Corporate Profits in the Public Interest, 80 NYU Law Review 733 (2005).
William Fisher, Corporate Governance: Overview, Case Studies and Reforms (West Academic Publishing, 2016).
- Milton Friedman, The Social Responsibility of Business is to Increase its Profits, The New York Times Magazine, Sept. 11, 1970, 33, reprinted in Milton Snoeyenbos, Robert Almeder and James Humber, eds., Business Ethics (1992), 72-77.
- Kenneth E. Goodpaster and John B. Mathews, Jr., Can a Corporation Have a Conscience? (1982) in Harvard Business Review on Corporate Responsibility, 131- 155.
- Aneel Karnani, The Case Against Social Responsibility, Wall Street Journal, Aug. 23, 2010.
- The Conceptual Foundations of Corporate Social Responsibility (Chapter 3), in Michael Kerr, Richard Janda, and Chip Pitts, eds., Corporate Social Responsibility: A Legal Analysis (LexisNexis Canada Inc., 2009).
- Rakesh Khurana and Herbert Gintis, What Is the Purpose of Business?, BIZED (January/February 2008).
- Jena Martin, Business and Human Rights: What’s the Board Got to Do with It? 2013 Illinois Law Review 960 (2013).
- John Micklethwait and Adrian Wooldridge, The Company: A Short History of a Revolutionary Idea (2005).
- Peter Muchlinski, Implementing the New UN Corporate Human Rights Framework: Implications for Corporate Law, Governance, and Regulation, Business Ethics Quarterly (Vol. 22, January 2012), 145-177.
Alan Palmiter, Corporations (Examples & Explanations), 8th Edition (Wolters Kluwer, 2015).
- Steven R. Ratner, Corporations and Human Rights: A Theory of Legal Responsibility, 111 Yale Law Journal 443 (2001).
- Lynn Stout, The Shareholder Value Myth (Berrett-Koehler, 2012).
- Lynn Stout, Why We Should Stop Teaching Dodge v. Ford, 3 Virginia Law and Business Review 163 (2008).
- Human rights and corporate law: trends and observations from a crossnational study conducted by the Special Representative, Addendum to the Report of the Special Representative of the Secretary General on the issue of human rights and transnational corporations and other business enterprises (23 May 2011), UN doc. A/HRC/17/31/Add.2
- Cynthia A. Williams, The Securities and Exchange Commission and Corporate Social Transparency, Harvard Law Review(Vol. 112, 1999), 1197, 1208-09.
- Jennifer Zerk, Multinationals and Corporate Social Responsibility (2006).
- A Brief History of the Body Shop, available at https://www.theguardian.com/fashion/fashion-blog/2011/nov/21/brief-history-of-body-shop.
- The Body Shop: What Went Wrong?, available at http://www.bbc.com/news/business-38905530 .
- Joel Bakan, Documentary, The Corporation (2003), available at https://www.youtube.com/watch?v=xHrhqtY2khc.
In my experience teaching at a law school, the best way for law students to understand the concepts embedded in corporate law and business entities is to have them draft documents reflective of practice. The sample fact pattern below require students to draft documents based on information that they have received.
Since business students spend substantial time in their curriculum immersed in corporate structure, the focus for them is frequently on the intersection of corporations, law and ethical conduct. I have used fact patterns with business students to help them understand how these three areas intersect.
Current events and cutting-edge issues on corporate law.
This bibliography may be cited as:
Jena Martin, “Teaching Resources for Corporations ‘101’,” in Teaching Business and Human Rights Handbook (Teaching Business and Human Rights Forum, 2017), (opens in a new tab)