Evaluating State Anti-Takeover Legislation: A Broadminded New Approach to Corporation Law or "A Race to the Bottom"?

Alan E. Garfield, Widener Law

Abstract

This commentary argues that the current system of corporate law – in which corporations are generally free to choose which state’s law will govern their affairs – is incapable of adequately addressing the concerns of employees or communities. At best, the system, through the operation of market forces, will produce laws which maximize shareholder welfare. To suggest that the system can be responsive to employee or community concerns, as some scholars have done, simply diverts attention from changes which should be instituted in other areas of law, such as labor, contract and pension, to better protect these constituencies.