Lawrence A. Cunningham— a trustee of the Museum of American Finance and member of the Financial History Editorial Board— serves as director of the John L. Weinberg Center for Corporate Governance at the University of Delaware, which marks its 25th anniversary in 2025. This article is adapted from a forthcoming commemorative volume produced by the Weinberg Center, Boardroom Legacy: The Weinbergs of Goldman Sachs and the Evolution of Corporate Governance( https:// weinberg. udel. edu).
Directors: Myth and Reality, skewer boards for failing to pose the discerning question. Responses to this deficiency tended to focus on formalities rather than functions— from director independence to corporate compliance. In the process, while the discerning question remains a staple of business management thought, its importance to corporate governance may be underappreciated.
The foundational role of the board in corporate governance explains why the thesis and speech refer to the board as the corporation’ s“ supreme” authority, akin to what scholars today might dub“ director primacy.” On the other hand, the Weinberg works stress that directors are ultimately beholden to stockholders, reflecting an enduring“ shareholder primacy” norm, while allowing consideration of other constituencies. That is, the shape and function of the board of directors, in turn, influence the roles, functions and status of all other elements in the broader corporate governance ecosystem, beyond directors and shareholders.
While the Weinberg works touch on many elements of this broad stage, their primary interest, as the titles underscore, is the board of directors. John’ s thesis is emphatic about that focus even when
John L. Weinberg
discussing the fundamental questions of corporate purpose. He wrote:
[ R ] esponsible capitalism is demanded … How will this social responsibility fit into the existing environment? Again the crucial position of the board of directors must be noted. Although the directors are selected by the stockholders of the corporation, their task is to manage the business in the interest of the investors, employees, customers and consumers of the company’ s products or services and in accordance with public policy as expressed in the laws of the land. To make a profit is basic. There can be no joint benefit if the corporation fails. However, after survival, the harmony of interests must occur.
The thesis addresses the tensions between conceptions of the corporation as primarily for stockholders or at least equally for other constituencies. It examines director roles and boardroom dynamics in light of these tensions, suggesting that neither extreme position is sustainable when directors need a practical framework to make decisions. However, the thesis wisely acknowledges that both viewpoints coexist— and always will.
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