Principles for Publicness

What duties does a “public” company owe investors, markets, and society? In recent years, Congress has both strengthened and diluted the federal disclosure and corporate governance regime that applies to public companies in the United States. However, it has never articulated a framework for what it means to be “public,” and how the obligations of public companies should reflect the needs of the constituencies whose financial and social interests they affect. As a result, firms fear that becoming public is an impediment to growth, and they game gradations of publicness to avoid compliance burdens. This Article proposes reframing the regulation of public companies under U.S. securities law around three regulatory principles: (1) suitability, (2) efficiency, and (3) representativeness. These principles—and associated tiers of regulation— will enable stock exchanges, investment banks, and other market intermediaries to shepherd companies toward heightened degrees of public exposure and accountability as their capital-raising needs evolve