The Internal Division of Powers in Corporate Governance

A review of shareholder participation in corporate governance and of shareholder relief from coerced acceptance of majority and managerial decisions shows this reciprocal relationship as it exists and as it might look in the future. State corporation law is in a state of flux as the already inarticulate faith in the primacy of owner over manager is weakened by the combined forces of traditional enabling law philosophy, excessively aggressive efficiency rationales, and powerfully focused managerial strategy. Intracorporate division of powers is fundamental to the proper regulation of fundamental changes, but real-world contradictions confound many of the assumptions underlying current theorems of economic efficiency that favor an unbridled bidding market for control. Federal regulatory supervision cannot engage in substantive scrutiny of bids or defenses, and substantive state supervision is constantly fighting commerce clause and supremacy clause negation, but there is no clearly appropriate role for law and legal institutions.