The Decline of Corporate Oversight: How All Three Branches of Government Lost Their Ability to Prevent Abuses of the Corporate Form

This paper explores how the legislature, executive and judiciary have lost their ability to prevent abuses of the corporate form. The legislature lost its ability to act as gatekeepers when general incorporation statutes replaced the special charter process. The executive lost some of its power to regulate businesses when the judiciary expanded constitutional protections for corporations. The judiciary lost its ability to find corporations liable for the wrongs or debts of their subsidiaries or affiliates through the development of the common law. These trends have allowed people to abuse the corporate form, which was initially intended to be a tool for maximizing public welfare. These opportunists undertake risky behaviors to maximize their private welfare at the expense of the public. This paper explores the normative, doctrinal and theoretical consequences of this problem and offers a solution to these issues.LL.M