The Law of Corporate Governing with Stephen Bainbridge and Roy Shapira Corporate Power and the Politics of Change with Matteo Gatti

Corporate governing—the phenomenon of corporations taking positions on contested social and political issues—operates within the legal framework of director primacy and shareholder wealth maximization. While the business judgment rule generally shields boards from liability for decisions citing reputational benefits or long-term risk management, legal boundaries exist where boards knowingly ignore critical risks or violate regulations. The *Caremark* doctrine, which mandates board oversight of material risks, remains a high bar for plaintiffs, though it is increasingly tested by ESG-related failures. Practical examples, such as Dick’s Sporting Goods’ decision to restrict firearm sales or corporate responses to vaccine mandates, illustrate how boards navigate these tensions. Ultimately, while legal intervention remains limited, boards must balance these political engagements with transparency and consistency to mitigate reputational fallout and avoid the pitfalls of reactive, performative activism.