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corporate governance; Stephen M. Bainbridge; Theory Review


If corporate boards are becoming more than “rubber stamps”, then Stephen Bainbridge and his new book are in the middle of a coup d'état in corporate governance. On the other hand, if this shift is not occurring and boards remain “rubber stamps”, then director primacy is no more than managerialism with a twist. Moreover, if director primacy represents the emergence of a new order for American corporate governance, then the merits of maintaining Delaware’s status quo director primacy must be carefully assessed, because the stakes are changing - maybe for the better and maybe for the worse.This article traces what has been argued in the literature to date. Part II will briefly refresh the reader’s memory by presenting one narrative of how the American corporate governance debate emerged. Part III will provide a concise chapter-by-chapter roadmap for Bainbridge’s arguments in The New Corporate Governance. Part VI will take a closer look at what Bainbridge tacitly suggests is the genius of Delaware’s corporate law by mapping the debates which have raged over managerialism, state competition, and Delaware: America’s regulatory laboratory for de facto “national” corporate law. This will provide a snapshot of the context from which The New Corporate Governance has emerged. Part V will conclude the review article by offering some reflections on what place the book holds within today’s American corporate governance debate.