Fiduciary Obligations in Business


Fiduciary Obligations in Business


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Book Chapter

Julian Velasco, Shareholder Primacy in Benefit Corporations, in Fiduciary Obligations in Business Forthcoming

The goal of the business corporation traditionally has been understood to be the maximization of shareholder wealth. A growing demand for social enterprise has led to the creation of various new forms of business organization, including the benefit corporation, that have the goal of creating both shareholder wealth and other public benefits. Although benefit corporations were developed to overcome the shareholder wealth maximization norm, it is not fair to say that they also overcome shareholder primacy. Properly understood, benefit corporations are shareholder-centric: they exist to allow shareholders to pursue altruistic goals rather than to require them to do so. This essay demonstrates this from the history and structure of the Model Benefit Corporation Act and argues that benefit corporation legislation ought to remain essentially enabling rather than mandatory in nature.

Publication Date



Cambridge University Press Forthcoming


New York


benefit corporation, corporate governance, corporate law, corporate purpose, fiduciary duty, public benefit, shareholder primacy, wealth maximization


Business Organizations Law | Law

Fiduciary Obligations in Business