A Corporate Power and the Politics of Change: Understanding “Corporate Governing”
B Two Types of Corporate Governing: Corporate Socioeconomic Advocacy and Government Substitution
C Key Questions Driving the Book
D Existing Literature; Contributions and Structure of the Book
In 2018, Nike featured former NFL quarterback Colin Kaepernick – known for kneeling during the national anthem to protest racial injustice and police brutality – in its thirtieth anniversary “Just Do It” campaign.Footnote 1 The tagline – “Believe in something. Even if it means sacrificing everything” – was crafted to align with Kaepernick’s positioning as an athlete-turned activist.Footnote 2 The move was controversial, sparking widespread debate. Critics destroyed Nike products, and the hashtag #BoycottNike trended on social media.Footnote 3 However, Nike’s market research had already indicated that its young, urban, and socially engaged core consumers would respond positively.Footnote 4
Behind the scenes, the campaign was no walk in the park. For starters, Nike nearly dropped Kaepernick a year earlier.Footnote 5 After he opted out of his contract with the San Francisco 49ers in 2017 and remained unsigned by any NFL team, Nike executives were uncertain about how to position him in their marketing.Footnote 6 Without a team affiliation, he no longer fit their typical sponsorship model, and the sports marketing group initially decided to remove him from their roster of sponsored athletes.Footnote 7 However, Nigel Powell, Nike’s longtime head of communications, strongly opposed the move, fearing backlash from consumers and the media.Footnote 8 Powell argued that severing ties with Kaepernick would make Nike appear aligned with the NFL against him, potentially alienating the younger, urban demographic that admired Kaepernick’s activism – an audience more crucial to Nike’s business than the older, more conservative NFL fan base.Footnote 9
Yet, despite being kept on the Nike roster, discussions about making Kaepernick the face of the “Just Do It” campaign began much later and only after outside pressure.Footnote 10 His lawyers argued that the company was contractually obligated to feature him rather than keep him inactive.Footnote 11 At the same time, Nike’s longtime ad agency pushed for Kaepernick to take a central role in a campaign.Footnote 12 The expected fallout was considered manageable as Nike’s partnership with the NFL was essentially folding after 2020 – it would no longer produce league merchandise for consumers.Footnote 13 Most importantly, Nike recognized that Kaepernick’s controversy was a strategic advantage – his supporters closely mirrored the brand’s target demographic.Footnote 14 After all, the company had long embraced athletes challenging societal norms, from Serena Williams advocating for gender equity to its support for LGBTQ+ representation in sports.Footnote 15
The ad was a big success. Nike’s online sales surged by 31 percent immediately after its release.Footnote 16 Despite an initial dip, the company’s stock rebounded to record highs, adding an estimated $6 billion to its market value.Footnote 17 The data reinforced Nike’s long-standing approach: Controversy could be lucrative when appropriately managed.Footnote 18
Nike’s activist branding extended beyond marketing. In 2020, following the George Floyd protests, it released an ad titled “For once, Don’t Do It,” an inversion of its famous slogan, calling on viewers to recognize and address racism. More substantively, in June 2020, Nike committed $40 million over four years to support organizations that address racial injustice.Footnote 19
Research shows that consumers support corporations they perceive as genuinely “values-driven,” rewarding those that align with their beliefs.Footnote 20 Nike’s consistent integration of social advocacy into its brand gave it a competitive edge over companies whose forays into activism seem opportunistic. This credibility helped Nike translate controversy into brand loyalty and financial success, while others have faced backlash or market instability.Footnote 21
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Not all corporate political moves yield the same results. In early 2022, Florida lawmakers presented the “Parental Rights in Education” bill,Footnote 22 better known as “Don’t Say Gay,” which restricts discussions on sexual orientation and gender identity in classrooms.Footnote 23 The bill ignited a public fight between the Sunshine State and one of the largest businesses operating there, The Walt Disney Company.
Disney’s entanglement in the controversy began not with a bold public statement but with a revelation from the Orlando Sentinel – the company had been quietly funneling political donations to the bill’s sponsor and cosponsors.Footnote 24 The news caught Disney off guard. On the surface, there was nothing unusual about it as the company routinely donated to politicians from both parties, leveraging its influence in Florida, where its parks and resorts make it an economic heavyweight. But this was different. The bill’s chief sponsor, Dennis Baxley, had long supported anti-LGBTQ+ legislation, making Disney’s financial backing look less like routine corporate lobbying and more like an endorsement of his agenda.Footnote 25
At first, Disney tried to manage the fallout with a carefully worded, generically pro-LGBTQ+ statement from CEO Bob Chapek, avoiding outright condemning the bill.Footnote 26 But the strategy backfired. Critics saw it as a glaring contradiction – how could a company that draped itself in rainbow flags every June and built an empire on family-friendly storytelling stay silent on an issue that directly impacted the communities it claimed to champion? The backlash was swift. Activists, Florida Democrats, and the public turned their attention to Disney, demanding a stronger response.Footnote 27
Then came internal pushback. Creatives from Disney’s animation division took to social media to highlight what they saw as contradictions in the company’s stance.Footnote 28 Owl House creator Dana Terrace and Ghost and Molly McGee director Sam King called out Disney’s pattern of celebrating LGBTQ+ representation in public while stifling it behind the scenes.Footnote 29 Their frustrations struck a nerve. As #BoycottDisney trended on Twitter, audiences who had once praised the company’s moves toward inclusivity began to question just how deep that commitment ran.Footnote 30 Disney, a company that had spent decades perfecting the art of controlling its image, suddenly struggled to manage a narrative slipping out of its hands.
To ease tensions with its stakeholders, Disney sidestepped one crisis only to walk straight into another – arguably an even larger one – as it ultimately took on the politicians.
In complete damage control, the day after an emergency meeting on the company’s political strategy, with Chapek and Corporate Affairs Chief Geoff Morrell trying to contain the fallout, Disney held its annual stockholder meeting on March 9, 2022.Footnote 31 There, Chapek admitted the company’s low-profile approach had “not quite gotten the job done”Footnote 32 and that Disney was joining a petition against similar legislation and would support efforts to protect the LGBTQ+ community.Footnote 33 He also noted he had called Governor Ron DeSantis that morning to express Disney’s “disappointment.”Footnote 34 DeSantis reacted by criticizing “woke corporations” like Disney and calling out their hypocrisy for being silent with governments like China.Footnote 35
Meanwhile, Chapek was still scrambling to reassure employees. “We need to be a better ally,” he wrote in a memo on March 11, 2022, trying to placate staff.Footnote 36 But by March 28, DeSantis signed the bill into law,Footnote 37 and Disney – boxed in and outmaneuvered – finally chose to go public with its opposition:
Florida’s HB 1557, also known as the “Don’t Say Gay” bill, should never have passed and should never have been signed into law. Our goal as a company is for this law to be repealed by the legislature or struck down in the courts, and we remain committed to supporting the national and state organizations working to achieve that.Footnote 38
The battle was on. Florida retaliated by revoking the self-governance rights Disney had in some districts, and DeSantis stated that Disney was accountable for some prior taxes and debts.Footnote 39 After Disney’s stock price declined,Footnote 40 a shareholder unsuccessfully sought access to its books and records.Footnote 41 Litigation between Disney and Florida concerning Disney’s self-governance rights ensued but settled.Footnote 42
Bob Chapek was ultimately replaced as CEO by his predecessor, Bob Iger, who returned to the role he had successfully held for fifteen years.Footnote 43 Since his return, Iger has stood by the substance of Disney’s stance on HB 1557, signaling continuity in the company’s position:
Frankly, the company was within its right – even though I’m not sure it was handled very well – … to speak up on an issue, constitutionally protected right of free speech [sic][.] … To retaliate against the company in a way that would be harmful to the business was not something we could sit back and tolerate.Footnote 44
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Tech firms have long waded into socioeconomic issues, but as political backlash heats up, their paths split.
Take Apple, one of the world’s largest companies. In the summer of 2020, as protests spilled into the streets and corporations scrambled to find their moral footing, Apple announced a $100 million Racial Equity and Justice Initiative.Footnote 45 The goal: to chip away at systemic inequities in education, economic opportunity, and criminal justice.Footnote 46 There was the Propel Center, an ambitious innovation hub for Historically Black Colleges and Universities (HBCUs). A Developer Academy in Detroit, offering free coding classes to underrepresented students.Footnote 47 And by 2023, the company doubled down, pledging over $200 million toward education, minority entrepreneurship, and legal advocacy for marginalized groups.Footnote 48
Apple’s engagement with social issues precedes these initiatives. In 2016, the company opposed North Carolina’s “bathroom bill,” which restricted LGBTQ+ rights. Alongside other major corporations, Apple signed statements condemning the law and supported legal efforts to overturn it.Footnote 49
Apple did not hesitate to criticize the highest officials. In response to President Trump’s remarks equating white supremacists and counter-protesters following the August 2017 “Unite the Right” rally in Charlottesville, Virginia, Apple CEO Tim Cook sent an email to employees expressing his disagreement with the President and announcing that Apple will be making contributions of $1 million each to the Southern Poverty Law Center and the Anti-Defamation League.Footnote 50
The company also played a role in the immigration debate, again pushing back against Trump’s policies. In response to the Trump administration’s attempt to rescind Deferred Action for Childhood Arrivals (DACA), Apple publicly defended its employees who were Dreamers and joined legal efforts supporting the program:Footnote 51 in 2019, it filed an amicus brief at the Supreme Court advocating for DACA’s preservation.Footnote 52 There was also the matter of Trump’s exit from the Paris Agreement. Apple, along with a parade of other big names, bought full-page ads in the country’s leading newspapers to publicly condemn the move.Footnote 53
In 2025, Apple faced a shareholder proposal to eliminate its diversity, equity, and inclusion (DEI) programs,Footnote 54 reflecting the growing hostility toward DEI.Footnote 55 The board opposed the proposal, stating that the company does not engage in discriminatory practices and accusing the proponent of overstepping – seeking to micromanage routine business decisions under the guise of shareholder oversight.Footnote 56 Apple shareholders ultimately rejected it by a wide margin.Footnote 57 More broadly, Apple reaffirmed its commitment to DEI as other companies retreated from it.Footnote 58
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Unlike Apple, other “activists” in Big Tech faltered. Meta – formerly Facebook – was once a leading force in corporate activism, much like Apple. Then, things changed.
For years, Meta positioned itself as one of corporate America’s most politically engaged companies. It took a stand on major social issues, often facing both internal and external pressures to do so. When Donald Trump posted “when the looting starts, the shooting starts” amid the George Floyd protests, Facebook employees staged virtual walkouts, openly rebuking CEO Mark Zuckerberg’s decision to leave the post up.Footnote 59 The backlash wasn’t just internal – activists and advertisers launched the “Stop Hate for Profit” campaign, pressuring Facebook to strengthen its policies on hate speech and misinformation.Footnote 60 While Zuckerberg stood by his original decision, the combination of employee dissent, advertiser revolt, and civil society mobilization pushed Facebook into making incremental policy shifts.Footnote 61
This was not the first time Facebook opposed Trump’s policies, as, just like Apple, the company joined corporate opposition to Trump’s withdrawal from the Paris AgreementFootnote 62 and Trump’s termination of DACA.Footnote 63 The company also vocally opposed anti-LGBTQ+ policies such as North Carolina’s HB2, which targeted transgender individuals.Footnote 64
Facebook’s political engagement reached its peak following the January 6 attack on the US Capitol. In its aftermath, the company barred Trump from its platform, citing the risk of inciting violence and spreading misinformation.Footnote 65 However, the ban was not permanent. As political and legal pressures intensified, Meta lifted the restriction and later, in a further turn, agreed to a $25 million settlement with Trump – underscoring the evolving, and increasingly fraught, relationship between social media platforms and political figures.Footnote 66
Ultimately, as the political landscape shifted, so did Meta’s approach. The company began retreating from its most visible commitments when Trump’s second administration took shape. Once a vocal advocate, the company began scaling back its diversity programs – adjusting hiring practices, supplier policies, and internal training efforts.Footnote 67 After Mark Zuckerberg’s video announcing the abandonment of DEI initiatives and a push for more “masculine energy” in corporate cultureFootnote 68 – emphasizing aggression and less censorship – Meta’s VP of HR, Janelle Gale, framed these changes as necessary responses to an evolving legal landscape, citing shifts in US DEI policies.Footnote 69 A company that once saw sociopolitical engagement as an asset was now treating it as a liability.Footnote 70
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What played out at Meta played out elsewhere too – from McDonald’s to Amazon, Walmart to Ford.Footnote 71 Different logos, same pattern. The corporate world perceived a tidal change. Its embrace of environmental, social, and governance (ESG) and DEI initiatives was once a boardroom mantra. Yet it has since turned into a political lightning rod, and with it, a growing risk for business. Conservative politicians, business leaders, and plaintiffs launched a battle against such initiatives, with figures like Donald Trump and Elon Musk emerging as their most influential critics.Footnote 72 Trump’s second administration moved swiftly to dismantle DEI efforts, while social media-fueled campaigns, litigation, and shareholder activism pressured companies to reconsider their commitments.Footnote 73 Many – like Meta – reversed course.Footnote 74 The Supreme Court’s decision in Students for Fair Admissions v. President and Fellows of Harvard College,Footnote 75 which struck down affirmative action in college admissions, added significant momentum, setting off a wave of legal challenges that sought to apply the same reasoning to corporate diversity programs.
Litigation has since become a primary battleground. Conservative legal groups, seizing on the post-Students for Fair Admissions legal landscape, argued that race-conscious corporate policies violate civil rights laws. American Alliance for Equal Rights v. Fearless Fund captured the new direction: The Eleventh Circuit blocked a grant program aimed at supporting Black women entrepreneurs – a signal that judicial skepticism toward corporate DEI efforts is no longer theoretical, but operational.Footnote 76
Meanwhile, Republican-led states launched their offensives on the legislative front, passing laws restricting ESG-based investment strategies. Texas blocked financial firms that refused to back fossil fuels, while Florida divested billions from institutions that factored social and environmental goals into investment decisions.Footnote 77 Similar efforts occurred on the DEI front.
The sharpest turn came at the federal level. The second Trump administration moved quickly – dismantling diversity programs in government, rescinding affirmative action rules for federal contractors, and instructing agencies to take a closer look at corporate DEI initiatives.Footnote 78
The message is clear: Corporations must rethink what had long been viewed as a strategic imperative, but is now seen as a potential risk. Facing mounting legal and political pressures, companies are reassessing their approach to social responsibility, weighing their commitments against an increasingly hostile environment.
A Corporate Power and the Politics of Change: Understanding “Corporate Governing”
The corporate stories above are not isolated, but form what I call “corporate governing.” Over the past decade, businesses have increasingly found themselves at the center of political and social debates, with expectations to take positions on issues ranging from racial justice and climate policy to LGBTQ+ rights and voting access. Whether through public statements, lobbying, or operational decisions, corporations have assumed a role seemingly beyond their traditional business domain. This development has been celebrated and contested, as corporate involvement in these territories has transformed from internal business strategy into political battleground.
Supporters argue that the strategy is sound. It reflects evolving stakeholder expectations and can serve as a force for positive change, particularly in areas where government action is slow or absent.Footnote 79 They point to corporate-led climate initiatives, diversity programs, and advocacy for underrepresented communities as evidence that business can advance broader societal goals.
Critics, by contrast, argue that such engagement is not only bad for business but also distorts the political process – granting unelected executives disproportionate influence over matters of public concern.Footnote 80 The backlash has intensified, driven by advocacy campaigns, legal challenges, political pressure, and policy interventions that have placed corporations under growing scrutiny.Footnote 81
As previously noted, the Supreme Court’s decision in Students for Fair Admissions emboldened legal attacks on corporate diversity initiatives. Republican-led administrations have also moved to curtail ESG investment strategies and scale back DEI programs, reinforcing the sense that corporate governing is entering a period of heightened legal and political risk.Footnote 82
Corporate Power and the Politics of Change examines this shifting landscape, tracing how corporations play a prominent role in policymaking and governance. It interrogates this phenomenon’s legal and normative implications, exploring its promises and risks. The central question is not simply whether corporations may or should engage in public affairs but how their involvement reshapes markets, institutions, and democracy. To begin the inquiry, I must be clear on what I mean by corporate governing.
B Two Types of Corporate Governing: Corporate Socioeconomic Advocacy and Government Substitution
Corporate governing is the exercise of corporate power to drive change. Companies exert influence in two primary ways.
The first is what I call corporate socioeconomic advocacyFootnote 83 – when businesses take stands on political and social issues, shaping debates that arguably extend far beyond their balance sheets. This isn’t just traditional lobbying. It’s Apple and Facebook throwing their weight to protest exiting the Paris Agreement or terminating DACA. It’s Disney pushing back against Florida’s “Don’t Say Gay” law. Whether to protect their brand, appeal to stakeholders, or hedge against future risks, corporations have increasingly positioned themselves as political actors, capable of shaping public sentiment as effectively as any politician. While some applaud this phenomenon, others are outraged.Footnote 84 Recent polling shows that Americans are experiencing some fatigue when hearing corporations speak on socioeconomic issues.Footnote 85
The second way corporations exert power through corporate governing is what I call government substitution: Corporations step in to provide resources, services, or protections, in other words, perform quasi-governmental roles when the actual government cannot (because of its dysfunction) or does not want to (because of its political credo) perform such functions.Footnote 86 Corporations undertake actions that are traditionally carried out by governments in lieu of, or in addition to, governments. This isn’t new – employers have long provided healthcare in the US because the government didn’t. But in recent years, companies have expanded their role in areas where the state is absent or unwilling to act. When Dick’s Sporting Goods stopped selling assault rifles to customers under twenty-one, it was setting a policy stricter than federal law.Footnote 87 When Lotus Development extended corporate benefits to employees’ domestic partners in the early 1990s, it wasn’t just about internal policy – it was extending rights unavailable under then-applicable law.Footnote 88 When JPMorgan Chase made a $30 billion pledge aimed at closing the racial wealth gap through race-based lending and investments in Black, Hispanic, and Latino communities, it was effectively engaging in economic policy.Footnote 89
These two forces – corporate socioeconomic advocacy and government substitution – are intertwined: together, they form corporate governing. Methodologically, I consider corporate socioeconomic advocacy a type of corporate governing activity, as opposed to mere advocacy, because of the political power corporations have in the policymaking process. With corporate messaging, corporations send signals to markets and stakeholders about what to expect from their future internal and external actions. As Martin Petrin said, “corporations have structural power by being able to set the agenda and by their ability to shape the economic environment.”Footnote 90 The two activities are tied together because “talk” (corporate socioeconomic advocacy) is often a complement of action (government substitution). In other words, corporate political messaging and advocacy complements measures, initiatives, and activities corporations have been doing for decades. To get a sense of the phenomenon, corporate actions, as opposed to mere statements, represented 40 percent of the sample in a study analyzing 293 events of corporate sociopolitical activism initiated by 149 firms across thirty-nine industries between 2011 and October 2016.Footnote 91
C Key Questions Driving the Book
As the backlash against corporate governing grows, firms are now confronting a fundamental question: Should they be in this space at all? Or are they overstepping, wielding power never meant to be theirs?
Much of the debate around corporate governing is tied to its use in connection with specific political projects. Some celebrate businesses that take a stand for reproductive rights or push for stronger climate policies. Others champion efforts to penalize corporations that “discriminate” against the gun industry or refuse to do business with fossil fuel producers. But these conversations often focus on the moment’s politics, missing the larger structural shift underway.
Corporate Power and the Politics of Change pauses judgment on those immediate battles to examine corporate governing as an institutional phenomenon – one that is reshaping the relationship between business and the state. Rather than asking whether any given political stance is right or wrong, this book interrogates the broader question: What happens when corporations assume roles traditionally reserved for governments?
Corporate governing has been framed in many ways – sometimes as a market-driven correction to political dysfunction, sometimes as a dangerous overreach by unelected executives. Corporate Power and the Politics of Change seeks to move beyond those binaries, systematically analyzing how corporate governing operates, what legal and policy frameworks exist to regulate it, and whether those frameworks are equipped to handle its growing influence. The book examines the promises and risks of corporate governing, first from a corporate perspective, considering market incentives, strategic positioning, and legal exposure, and then from a societal one, exploring its impact on social activists, society at large, and democratic institutions. It also looks at possible corporate and policy guardrails, asking whether new governance structures or regulatory interventions could help mitigate potential harms. Finally, it surveys how firms respond to the backlash, whether by doubling on advocacy, quietly retreating, or finding new ways to navigate an increasingly complex political landscape.
These questions animate the book throughout the various chapters. How did corporate governing evolve, and why has it become more contentious? Does it align with traditional corporate law and fiduciary duties, or does it stretch legal boundaries? What are its business, strategic, societal, and political implications? What unintended consequences might arise from businesses assuming quasi-governmental roles? And how should corporate governance adapt to this new reality?
The goal is not to take sides but to provide a deeper, more comprehensive understanding of corporate governing – how it works, why it matters, and what it means for the future of business and society.
D Existing Literature; Contributions and Structure of the Book
Corporations increasingly engage in political and social issues to protect their business interests, particularly in recruiting and retaining talent and attracting consumers.Footnote 92 A 2019 Accenture survey found that 62% of consumers expect companies to take a stand on social issues, 53% would voice complaints if dissatisfied with a brand’s stance, 47% would switch to a competitor, and 17% may never return.Footnote 93 Beyond self-interest, corporations are often seen as political actors of last resort, especially in the US, where congressional paralysis has left businesses to fill governance gaps.Footnote 94 This expectation pressures corporations to take stances on hot-button political issues, even at the risk of backlash. The push for corporate action often comes from employeesFootnote 95 and institutional investors who embrace ESG principles.Footnote 96
Scholarly perspectives on corporate activism vary. Some cautiously support this evolving role,Footnote 97 arguing that corporate purpose extends beyond shareholder valueFootnote 98 and that political engagement should be analyzed under a risk management perspective.Footnote 99 Others express skepticism or outright opposition.Footnote 100 Critics warn that corporate activism can distract from core business responsibilitiesFootnote 101 or even distort democratic processes.Footnote 102 Popular discourse reflects these concerns, with some politicians building their careers in opposition to “woke” corporations.Footnote 103 In the middle are some voices suggesting that when engaging in activism, corporations inevitably face political legitimacy challenges that need to be addressed via policy fixes like enhanced transparency and stakeholder engagement.Footnote 104
This book builds on existing literature on corporate activism, which has traditionally framed the phenomenon within the context of social activism and movements,Footnote 105 as well as on scholarship that critiques or challenges it.Footnote 106 While some authors view corporate involvement positively,Footnote 107 others argue that its political implications remain problematic even when social activism aligns with business interests.Footnote 108 They contend that corporate leaders act as unelected policymakers,Footnote 109 risking the alienation of stakeholders over divisive topics.Footnote 110 Stephen Bainbridge’s recent work echoes these concerns, questioning not only the democratic legitimacy of corporate activismFootnote 111 but also its profitability.Footnote 112
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Corporate Power and the Politics of Change advances the existing literature through five main contributions.
First, I map and categorize various areas of corporate governing. Chapter 1 examines the evolving role of corporations as agents of change, distinguishing between the two forms of corporate governing: government substitution, where firms step in to address societal needs in the absence of effective government action, and corporate socioeconomic advocacy, where businesses publicly engage in political and social issues. These dual functions – providing direct support to stakeholders while shaping public discourse – reflect a historical trajectory dating back to corporations’ origins as instruments of public goods and extending through critical junctures like the Progressive Era, the 1960s, and beyond.Footnote 113
In Section B, Chapter 1 maps contemporary corporate initiatives across key policy areas, including racial equity, gender and reproductive rights, LGBTQ+ rights, climate action, voting rights, and gun control. This section highlights direct corporate interventions – such as funding racial justice initiatives, offering reproductive healthcare benefits, and enforcing workplace diversity programs – and public advocacy efforts, such as corporate opposition to restrictive voting laws and environmental deregulation. Section B closes by introducing the emergence of conservative corporate governing, where firms take conservative positions or roll back earlier prosocial initiatives.
To be sure, corporate governing has faced intensifying pushback from conservative forces. In Section C, Chapter 1 explores the “anti-woke” movement, detailing political advocacy, litigation, and legislative efforts designed to curb corporate engagement in ESG and DEI. The second Trump administration accelerated this trend, deploying executive orders and regulatory actions to dismantle DEI programs. As a result, many companies have recalibrated their strategies, with some retreating from high-profile initiatives while others maintain their commitments despite heightened scrutiny.
Chapter 1 argues that while corporate governing is under significant pressure, it remains a defining feature of the modern corporate landscape. Whether corporations continue to act as substitutes for government action or as politically engaged entities will depend on ongoing legal, political, and market developments.
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Second, in Chapter 2, I explore the key drivers behind corporate governing, examining both internal corporate dynamics and broader societal forces that shape corporate engagement in public policy.
Within firms, bottom-up pressure from employees – particularly Millennials and Gen Z – has been a critical force, compelling corporations to address social issues through workplace policies and public advocacy.Footnote 114 Investors – especially large asset managers and ESG-focused funds – have also tried to steer corporate behavior, using shareholder engagement and capital allocation to push environmental and social priorities.Footnote 115 At the same time, top-down shifts in corporate purpose, including the revival of stakeholderism, have nudged companies to look beyond short-term profit maximization.Footnote 116
And yet, corporate lobbying and political speech remain a parallel, often contradictory force. Businesses continue to spend heavily to shape public policy – frequently in ways that undercut the very values they promote in press releases and ESG reports.Footnote 117
Beyond these corporate-level drivers, Chapter 2 situates corporate governing within broader social and political trends. It examines how movements such as #MeToo, Black Lives Matter, the Climate Movement, and March for Our Lives have pressured companies to take actions and stands on social justice issues, particularly in an era of digital activism.Footnote 118
The first Trump presidency marked a turning point too, as corporations actively opposed policies such as the Muslim Ban, the withdrawal from the Paris Climate Agreement and the termination of DACA.Footnote 119
This era also highlighted the growing expectation that corporations act when traditional political channels fail, a reality exacerbated by congressional gridlock, polarization, and structural barriers to reform. Chapter 2 details how systemic dysfunction – driven by perpetual campaigning, gerrymandering, the filibuster, and the disproportionate influence of small states in the US Senate – has made corporate intervention more prominent in policymaking.Footnote 120
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Third, I develop doctrinal and normative frameworks for analyzing both forms of corporate governing.
Chapter 3 maps the relevant legal terrain, asking whether these practices expose companies to meaningful legal risk. Critics often object that corporations are reaching beyond their proper sphere when they weigh in on social and political issues. This book provides a counterpoint: Corporate governing is, in many cases, part of doing business.
Most such actions fall within the broad discretion afforded to directors and officers, and are generally protected by the business judgment rule. Chapter 3 offers a framework for evaluating corporate governing, distinguishing between government substitution – where firms fill regulatory or functional voids – and corporate socioeconomic advocacy – where firms take public stands on contested issues. Case law, including the 2023 Delaware Chancery Court decision in Simeone v. Walt Disney Company,Footnote 121 suggests that both forms remain well within the bounds of corporate law.Footnote 122 Nor do oversight duties, as currently understood, impose significant additional obligations.Footnote 123
While fiduciary duties impose minimal constraints, compliance risks are beginning to surface. Though not binding on private companies, the long arc of the Supreme Court’s decision in Students for Fair AdmissionsFootnote 124 has already chilled some corporate DEI efforts and may lead federal courts to further narrow the legal space for such initiatives. Chapter 3 also briefly flags emerging risks from securities fraud litigation and the growing wave of anti-ESG and anti-DEI legislation.Footnote 125
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After analyzing legal risk, the book in Chapter 4 addresses the multifaceted merits of corporate governing. The debate has been contentious and inconclusive partly because it lumps separate normative dimensions. Chapter 4 separates four distinct normative questions. The first two focus on corporate considerations: Is there a business case for corporate governing – does it enhance firm value? Even so, is it strategically sensible for a corporation to engage in it? The latter two questions address broader societal and political implications: Does corporate governing advance the goals of social activists and benefit society at large? Does corporate governing, in turn, pose a risk to democratic institutions?
The answers to the first two questions are cautiously affirmative: For some firms, corporate governing may enhance value and be strategically sound, depending on factors like the specific policy issue, firm characteristics, perceived authenticity of the initiative, alignment with the firm’s core mission and prior messaging, and the expectations of its stakeholders and the various markets in which the firm operates, such as product, labor, and stock markets.Footnote 126 Like any initiative, corporate governing is risky but potentially profitable, and most companies plan for these risks. Importantly, corporate governing initiatives are voluntary, shaped by a firm’s strategic choices rather than legal mandates. Companies embrace them when they perceive value or advantage – some have thrived as a result, while others have not. Without clear evidence of widespread harm, limiting these initiatives on business grounds becomes a challenging case to make.Footnote 127
The other two questions are more problematic. Not so much for social activists who know the risk of corporate co-opting and can always part ways with corporate partners if the results are unsatisfactory.Footnote 128 However, whether corporate governing benefits society is more challenging and often politically divisive.Footnote 129 Another risk is that delegating socioeconomic issues to corporations might lead citizens to disengage from traditional politics and government.Footnote 130 The book further digs into these issues in Chapter 5.
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Fourth, based on the proposed normative framework, in Chapter 5, this book investigates the promises and risks of corporate governing from both corporate and societal perspectives. Under the former, corporate governing – when strategically planned and executed – can enhance recruitment, improve employee morale, strengthen branding, and even boost long-term profitability.Footnote 131 However, it also carries risks, including alienating stakeholders with opposing views, unsettling shareholders, and creating tensions within the existing corporate governance framework when broader agendas conflict with shareholder and stakeholder expectations.Footnote 132 While these challenges are not insurmountable, they may require policy or private ordering refinements to ensure corporate governing aligns with business objectives and governance structures.
From a societal perspective, the implications of corporate governing are more challenging. On the one hand, it can achieve political and social goals that traditional politics struggles to secure, as demonstrated by the corporate sector’s critical role in advancing LGBTQ+ rights.Footnote 133 Yet, on the other hand, corporate governing also raises several societal risks: It is undemocratic as it lacks accountability and representativeness; it is divisive and anti-pluralistic; its reach is partial; corporations might lose interest or, worse, be opportunistic, absent, or antagonistic to society’s quests; and prioritizing the corporate channel over traditional politics is risky, as it may ultimately discourage citizens from engaging in the latter.Footnote 134
These risks include not doing enough for societal issues and weakening democratic institutions. First, corporate governing is insufficient: Corporations will not foster true social progress in areas where their interests conflict with society, like tax, antitrust, labor, privacy, and financial reform, among many others.Footnote 135 The limitations of corporate governing go beyond concerns about the conflicts of big business; they stem from the fundamental structural incapacity of private actors and markets to tackle large-scale societal challenges effectively. Addressing such issues requires durable, systemic, coordinated, and enforceable solutions – capabilities that only states can reliably provide.Footnote 136 Corporations, by their very nature, lack these mechanisms, a fact made strikingly clear by their swift retreat from prior commitments under the pressure of the second Trump administration.Footnote 137 This is an important cautionary tale to remember before embarking on potentially perilous policy changes that would entrust executives with more extensive mandates and roles than they currently have.
Under a separate line of criticism, corporate governing is dangerous. Two main reasons for that: First, it can be undemocratic, sacrificing dissenter rights over policies that bypass the democratic process;Footnote 138 second, it risks weakening politics and democratic institutions if corporations dominate the reform space.Footnote 139 Chapter 5 argues that while the undemocratic nature of corporate governing may be less severe than some claim, the real concern lies in its potential to undermine politics. This shift – where corporations take on policymaking roles – could normalize corporate influence in areas traditionally reserved for the state, reducing transparency and accountability while consolidating power in unelected private actors. Over time, corporate governing may not just supplement politics but replace it, exacerbating the imbalance between public and private power in ways that threaten democratic stability. Needless to say, the aftermath of the 2024 election - and Elon Musk’s short tenure in formal political power through the Department of Government Efficiency (DOGE) - has exponentially heightened this type of risk.
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Fifth, and finally, in Chapter 6, the book explores potential corporate governance safeguards to manage corporate governing risks, particularly in corporate socioeconomic advocacy. After describing the constraints imposed by Citizens UnitedFootnote 140 and the business judgment rule, this chapter examines regulatory and market-based solutions to mitigate risks while preserving corporate speech and discretion.
Chapter 6 first considers disclosure as a soft intervention, questioning whether and how corporations should provide more precise insights into their policy agendas, lobbying, and advocacy efforts through periodic reports.Footnote 141 Chapter 6 then evaluates board empowerment and oversight mechanisms, including disinterested director involvement, dedicated committees, enhanced board accountability, and shareholder approval for corporate governing initiatives.Footnote 142
However, Chapter 6 questions the viability of legislative interventions to advance corporate governing reform, given the political polarization surrounding the issue. It then explores how, in the absence of legal reform, market forces – such as investor pressure, litigation risks, and internal corporate policies – may shape corporate governing.Footnote 143
Indeed, many firms have adopted internal policies to navigate political and social engagement, particularly in response to mounting litigation risks and evolving investor expectations. Analyzing disclosures from two samples of S&P 500 companies – the S&P 100 and the smallest 100 in the index – Chapter 6 identifies patterns in how corporations structure their internal guidelines and ensure transparency around corporate governing activities.Footnote 144 The findings reveal variation across industries and firm sizes, with larger companies being more explicit about their advocacy strategies. The survey also finds that many frame their initiatives as aligned with business and industry interests rather than broader societal concerns.
Notably, Chapter 6 underscores that clarity and transparency in corporate governing are not just external expectations but serve the best interests of corporations themselves. By articulating clear policies, defining decision-making processes, and ensuring consistency in their advocacy efforts, companies may limit reputational backlash, reduce litigation risks, and preempt regulatory scrutiny. In an environment where corporate governing increasingly attracts legal and political challenges, proactive disclosure and structured internal governance can function as legitimacy and risk management tools.
While corporate governance mechanisms can help manage risk at the firm level, they are insufficient to address the broader societal implications of corporate governing. Reliance on corporations to fill policy gaps raises concerns about democratic accountability and long-term governance stability – issues that extend beyond the corporate sphere and require broader political reform. Market forces, including shareholder activism, consumer pressure, and reputational risks, continue to shape corporate governing decisions, but whether they provide sufficient discipline at the societal level remains an open question.
As no easy policy fixes exist, addressing this risk requires ambitious efforts from multiple actors to prevent the erosion of reform through traditional democratic institutions. This demands changes in norms, political goodwill, and possibly political reform – all areas where corporate governance can assist but not be the driving force.
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A note to the reader.
Chapters 1 and 2, which introduce the phenomenon of corporate governing and explore its key drivers, are written with a general audience in mind. Chapters 3–6 are more technical. Chapters 3 and 6 contain the book’s most concentrated legal analysis. They are aimed primarily at lawyers and social scientists, though remain accessible to non-specialists. Chapters 4 and 5 address the normative dimensions of corporate governing with a broader lens, drawing on insights from law, economics, finance, management, marketing, political theory, and political science. While intended for a wide readership, they are denser than Chapters 1 and 2.
