A Judicial View from Delaware
March 09, 2011
(l-r) Geoff Beattie, LLB '84, Leo E. Strine Jr., UWO President Amit Chakma and Professor Christopher Nicholls
Leo E. Strine Jr., Vice Chancellor of the Delaware Court of Chancery, reminded the audience that corporate directors are bound to try to maximize profits for their stockholders as he delivered the Third Annual Beattie Family Lecture in Business Law to a full house at Western's Faculty of Law on Tuesday, March 8. No one should therefore be surprised, Judge Strine said, when aggressive pursuit of profit leads to increased levels of risk.
Provocatively titled, "Bailed out Bankers, Oil Spills, Online Classifieds, Dairy Milk and Potash: Our continuing struggle with the idea that for-profit firms seek profit," Judge Strine's lecture drew on a series of contemporary examples to show how corporate law alone cannot ensure socially desirable results.
Referring to the BP Oil spill, the subprime mortgage disaster and Kraft's takeover of Cadbury, Judge Strine argued, "The public interest, in the end, depends on protection by the public's elected representatives in the form of law."
"The well-intentioned efforts of many entrepreneurs and company managers, who have a duty to their investors to deliver a profit, to be responsible employers and corporate citizens, is undoubtedly socially valuable," he acknowledged, "But it is no adequate substitute for a sound legally determined baseline."
Strine noted it would be naive to believe that for-profit businesses are in a position to self regulate and evaluate risk.
"The environmental wreckage in the Gulf of Mexico and the global human wreckage caused by the financial sector's imprudence should be rather plain evidence of that truth," he said.
"As Canada's leading business law school, we were honoured to host one of the world's most influential business law jurists," said Professor Christopher Nicholls, director of the Business Law program at Western Law. "Vice-Chancellor Strine's opinions invariably display a piercing intellect, and his Western Law lecture was both entertaining and thought provoking."
Vice Chancellor Strine was first appointed to the Delaware Court of Chancery in 1998. He has taught at UCLA School of Law, the University of Pennsylvania Law School, the Vanderbilt University Law School and the Harvard Law School.
The Beattie Family Lecture Series in Business Law was generously established by Geoff Beattie, LLB '84, Deputy Chairman of Thomson Reuters and president of The Woodbridge Company Limited.
In 2009 economist Robert Shiller gave the inaugural Beattie Family Lecture in Business Law on the topic "Animal Spirits: How Human Psychology caused the Current Economic Crisis." Nobel Prize-winning economist George Akerlof delivered the 2010 Beattie Family Lecture on the topic "Identity Economics."
