The Shaping Force of Corporate Law in the New Economic Order

My topic for this Allen Chair lecture is the shaping force of corporate governance in the new economic order. It is easy to think of corporate law as an arcane field with mysterious terms and peculiar rules, ultimately of interest only to those who are prepared to bill at least 2000 hours a year to unravel its complexities. This is the view that there is a pointless mystery about shareholders, directors, common stocks, debentures, and the bizarre creature my class encountered recently, a convertible exchangeable cumulative preferred stock; and that ultimately corporate law and practice consists of the expert manipulation of formal rules and practices, which is of importance to the particular parties in a particular matter, but of little global importance. I want to articulate a different position: that corporate law, and the associated corporate governance regime, is a very important variable in determining economic performance. I want to explore this thesis in terms of the shaping influence of corporate law, in what I call the New Economic Order. I then want to take up Virginia corporate law, which, as reflected in the outcome of the control contest for the Shenandoah Valley poultry producer, WLR, takes a decidedly negative stance on the market in corporate control. Anti-takeover animus has produced anti-takeover laws in Virginia that seriously distort longstanding corporate law norms governing the conduct of directors and that sweep far beyond any defensible objective