ABSTRACT
Corporate law has embraced private ordering – tailoring a firm’s corporate governance to meet its individual needs. Firms, particularly venture-capital backed start-ups, are increasingly adopting firm-specific governance provisions such as dual-class voting structures, arrangements to create stable shared control rights among a coalition of minority shareholders, and provisions that limit the permissible fora for shareholder litigation. Courts have broadly upheld these provisions as consistent with the contractual theory of the firm. Commentators too, while finding some governance provisions objectionable, nonetheless support a private ordering approach as facilitating innovation and enhancing efficiency …
Fisch, Jill E, Private Ordering and the Role of Shareholder Agreements (August 2, 2020). U of Penn, Inst for Law & Econ Research Paper No 20-48.
First posted 2020-08-06 05:01:04
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