It is a privilege to contribute to this Festschrift for my friend, mentor, and co-author, Leo Strine, Jr. It is also a pleasure to revisit his vast body of work and to re-experience the breadth and depth of his scholarship, as well as reflect on his unparalleled influence on the development of corporate law that he brought about while presiding over its most influential courts for twenty-one years.
In thinking about this essay, I recalled a conversation that I had with “CJS” when I was serving as his law clerk. In this conversation, he decried (with James Taylor blasting in the background) how institutional investors discharged their fiduciary duties, directing me to a study that revealed, disappointingly, that so-called “green” mutual funds voted no differently than their “brown” counterparts. The conversation was a revelation to me; it launched me on a path of considering how institutional investors wield their substantial power and what agency problems might stand in the way.
As this essay will demonstrate, Chief Justice Strine was one of the first to highlight these problems (coining the phrase “the separation of ownership from ownership”) and propose reforms. In his final year of judicial service, he drafted legislation that would crystalize many of these ideas, garnering support from many legislators. Since that time, he has continued to push institutional intermediaries to take a broad view of their duties, observing that their beneficiaries may also be workers, and are always human beings with interests in clean air and water. In his scholarship and advocacy, Chief Justice Strine has been extremely influential, driving reforms of governance practices at major institutions and influencing government bodies at the state and federal level to focus on these issues.
In this essay, I highlight some of Chief Justice Strine’s many contributions to our understanding of institutional investors, their incentives, and their duties. In so doing, I focus on his scholarship rather than his jurisprudence, although these issues have also come up in the latter. I also discuss some of the policy proposals that Chief Justice Strine has advanced that would change the incentive environment for institutional investors, and also address their outsized influence relative to other corporate stakeholders. In so doing, I hope to not only reflect on Chief Justice Strine’s extensive contributions to this area of law, but also influence his many remaining years of scholarship and advocacy. And in writing this essay, I will highlight themes that are reflective of Chief Justice Strine’s approach: in particular, his “clear-eyed” view that takes as his starting point what the law is, rather than what it should be; his willingness to modernize and humanize stale legal frameworks; and his desire to make the world a better place for ordinary people.
Business Organizations Law | Law | Legal Writing and Research
Dorothy S. Lund,
Toward a Fair and Sustainable Corporate Governance System: Reflections on Leo Strine, Jr.'s Writing on Institutional Investors,
U. Pa. J. Bus. L.
Available at: https://scholarship.law.columbia.edu/faculty_scholarship/4013