The shareholder-primacy and stakeholder accounts run on the same ordinary-for-profit chassis and diverge on emphasis; the statutory public benefit corporation is the principal U.S. for-profit form whose fiduciary target is multi-constituency by operation of law.
Three models of corporate purpose compared on four axes A four-row by three-column matrix. Rows are the four operative axes (fiduciary target, decision rule, exit constraint, shareholder remedy). Columns are the three corporate forms (shareholder primacy, stakeholder for-profit, public benefit corporation).
CORPORATE PURPOSE · THREE MODELS, FOUR OPERATIVE AXES
AXIS
SHAREHOLDER PRIMACY
STAKEHOLDER (FOR-PROFIT)
PUBLIC BENEFIT CORP.
01 · FIDUCIARY TARGET
Who is the duty owed to?
Berle (1931); Friedman (1970);
Bainbridge (2003).
Stockholders as residual claimants
Long-term stockholder welfare;
stakeholder consideration permitted
only if rationally tied to it.
The corporation as institution
Long-term firm welfare; multiple
specific-asset constituencies
(Blair–Stout team production).
Public benefit set in charter
Balance: pecuniary interests,
stakeholders affected, charter
public-benefit purpose.
02 · DECISION RULE
Clear-day operating choices.
ALI Principles § 2.01.
Business judgment
Director discretion if rationally
related to stockholder benefit.
Mediating balance
Constituency statutes (33 states)
permit non-dominant weighing.
Mandatory tri-party balance
DGCL § 365(a) (Del.); TBOC
subchapter S (Tex.).
03 · EXIT CONSTRAINT
Sale-of-control mode.
Revlon (1986).
Revlon appliesMaximize stockholder value at
sale; stakeholder weight only if
tied to stockholder gain.
Revlon applies (Del. forum)Constituency statutes do not
override Delaware sale-of-control
duty when Del. law governs.
Charter-bound
Sale of control must honor the
stated public benefit; conversion
via ordinary stockholder approval.
04 · SHAREHOLDER REMEDY
When can a stockholder sue?
Strine (2015).
Direct & derivative
Revlon enforcement; entire-fairnessin controller-conflict transactions.
Business-judgment deference
Stakeholder weighing absorbed
into BJR (Shlensky , A.P. Smith ).
Statutory benefit suit
DGCL § 367 (Del.) sets 2%-or-
$2M holding threshold for benefit suit.
Sources: Revlon, Inc. v. MacAndrews & Forbes Holdings, Inc. , 506 A.2d 173 (Del. 1986); 8 Del. C. §§ 361–368 (Del. PBC subchapter); Tex. Bus. Orgs. Code Ann. §§ 21.951–.959 (Tex. PBC subchapter S).
How to read. Read each row across as a single doctrinal question. The shareholder-primacy column is the Delaware ordinary-for-profit default; the stakeholder column reflects ordinary-for-profit doctrine in the 33 constituency-statute states; the PBC column is the statutory benefit-corporation form, available in Delaware (8 Del. C. §§ 361–368 ) and 38 other states. Texas adopted PBC subchapter S in 2017, codified at Tex. Bus. Orgs. Code §§ 21.951–.959 .
Primary sources. Revlon, Inc. v. MacAndrews & Forbes Holdings, Inc., 506 A.2d 173 (Del. 1986) (sale-of-control rule); A.P. Smith Mfg. Co. v. Barlow, 98 A.2d 581 (N.J. 1953) (corporate philanthropy under BJR); Shlensky v. Wrigley, 237 N.E.2d 776 (Ill. App. Ct. 1968) (stakeholder consideration absorbed into BJR); ALI, Principles of Corporate Governance § 2.01 (1994).