Roberto Tallarita has posted "Fiduciary Deadlock" on SSRN (here). Below is the abstract.

In May 2022, the shareholders of BlackRock, the world’s largest asset manager, voted on a proposal to push portfolio companies to reduce their social and environmental externalities, even if doing so would reduce the companies’ stock value. The proposal was based on the theory that BlackRock should maximize the value of its whole portfolio (portfolio primacy), rather than the value of individual companies (shareholder primacy), and it is driven by the expectation that portfolio primacy can harness the power of large asset managers to fight climate change and other pressing social problems. Although the proposal was rejected, portfolio primacy is gaining increasing support and will likely inspire similar proposals in the next proxy seasons. In this Essay, using the BlackRock proposal as a paradigmatic case, I examine how portfolio primacy interacts with the fiduciary duties of large asset managers. I argue that portfolio primacy creates a fiduciary deadlock: a situation in which multiple fiduciary relationships—between investment adviser and fund investors, between corporate managers and shareholders, between controlling and minority shareholders—come into conflict with each other. I show that, within the existing structure of fiduciary law, portfolio

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My paper, Crony Stakeholder Capitalism, 111 Ky. L.J. 441, 442 (2023), is now available on Westlaw, and I have posted the final version on SSRN here. Below is the abstract.

Capitalism in the context of corporate governance may be understood as an economic system that equates efficiency with corporate managers only pursuing projects that they reasonably expect will have a positive impact on the value of the corporation's shares (accounting for opportunity costs). Such projects may be referred to as positive net-present-value (NPV) projects. Stakeholder capitalism, on the other hand, may be understood a number of different ways, including: (1) an improved form of calculating NPV; (2) a conscious choice to sacrifice some NPV in order to advance broader social objectives; (3) a form of rent-seeking; (4) a form of green-washing; (5) a manifestation of the agency problem whereby managers prioritize their personal political preferences over NPV; (6) a manifestation of the agency problem whereby managers prioritize their personal financial wealth over NPV; (7) a form of crony capitalism. Of these, an argument can be made that only the first is both legal and efficient, at least in the case of Delaware corporations operating under the relevant default

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From America First Legal (here) on April 5, 2023:

Today, as part of its initiative under the Center for Legal Equality, America First Legal (AFL) asked the U.S. Equal Employment Opportunity Commission (EEOC) to open a civil rights investigation into McDonald’s Corporation for engaging in unlawful, discriminatory hiring practices. Federal law forbids discrimination based on race, color, religion, sex, or national origin by an employer against an employee or potential employee. Yet, McDonald’s publicly admits to intentionally violating this law. McDonald’s even created a “Diversity Snapshot” that breaks down its staffing goals by race …. As part of its “Allyship through Accountability” program, McDonald’s actively uses hiring practices focusing on immutable characteristics rather than skillsets…. The odious and illegal practice of hiring based on immutable characteristics like race is a flagrant attack on civil rights that harms all Americans. Under the guise of “equity,” companies like McDonald’s openly discriminate against individuals without facing any repercussions or pushback. America First Legal is determined to stop the destructive hiring practices of woke companies across the country and will continue to fight for equal opportunity for all Americans.

Gene Hamilton, America First Legal Vice President and General Counsel, added the following:

So

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Imagine a group of state university faculty sitting around a table discussing their upcoming five-year plan. They decide that one of their priorities will be to promote some or all of the following eight concepts in their classes (the hypo also works if you imagine a board of directors contemplating priorities for mandatory employee training):

1. Black people are morally superior to White people.
2. White people are inherently racist.
3. All White people are privileged, and all Black people are oppressed.
4. Assertions of color-blindness are racist.
5. White people should be discriminated against because of actions committed in the past by other White people.
6. White people should be discriminated against to achieve diversity, equity, and inclusion.
7. All White people bear personal responsibility for and must feel guilt, anguish, or other forms of psychological distress because of actions committed in the past by other White people.
8. Such virtues as merit, excellence, hard work, fairness, neutrality, and objectivity are racist and were created by White people to oppress Black people.

If you think that should be illegal (or if you think that would be the best of all possible worlds), then you might be interested in a recent Federalist Society litigation update on the Stop…

The following is from the ADF press release, which you can find here.

The U.S. Securities and Exchange Commission has ruled against JPMorgan Chase’s attempt to exclude a shareholder resolution on viewpoint diversity from its ballot for its annual shareholder meeting…. Submitted by the Bahnsen Family Trust, the proposal directs Chase’s board of directors to evaluate and issue a report on the bank’s disturbing trend of politicized debanking…. In the past two years, Chase has denied payments or canceled accounts associated with people and organizations who hold mainstream American values, such as former Ambassador Sam Brownback, the Arkansas Family Council, and Defense of Liberty…. The SEC ruling comes amid a rising wave of opposition to Chase’s engagement in cancel culture through politicized debanking. Chase was featured prominently in the “Statement on Debanking and Free Speech,” signed in November of last year by a group of nearly 60 financial professionals. Last week, Nebraska State Treasurer John Murante led a group of 14 colleagues in a letter to Chase CEO Jamie Dimon calling on him to address and correct the issue by adopting policies recommended by ADF’s Viewpoint Diversity Score 2022 Business Index and providing necessary

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Earlier this month, Daniel Lennington, deputy counsel at the Wisconsin Institute for Law and Liberty, published a piece at The Federalist entitled, “How Corporations Launder Their Race Discrimination Through Third Parties.” Here is an excerpt:

[T]he world’s largest corporations desperately want credit for being “woke” and advancing “racial equity” through programs targeted solely at certain races. Such practices — involving blatant race discrimination — are immoral and contrary to core American values, despite being in fashion with corporate elites. Yet the typical guide rails — state and federal law — may be less available remedies if corporations launder their discrimination through third parties. Corporations should avoid this temptation to outsource their discrimination and perhaps take a lesson from Comcast, one of the first corporations to face legal scrutiny for its race-based program. Following the settlement with our clients, Comcast renewed its efforts toward something called “Project Up,” which, from all indications, is a race-neutral program designed to “advance economic mobility, and open doors for the next generation of innovators, entrepreneurs, storytellers, and creators.” Comcast will run this program itself and reap the goodwill that will undoubtedly come, while adhering to (lawful) nondiscrimination principles.

In response to this piece…

From a New Civil Liberties Alliance press release (here):

In a thorough and well-reasoned decision, Judge Terry A. Doughty of the U.S. District Court for the Western District of Louisiana has denied government defendants’ motion to dismiss in State of Missouri, et al. v. Joseph R. Biden, Jr., et al. The New Civil Liberties Alliance, a nonpartisan, nonprofit civil rights group, represents renowned epidemiologists Drs. Jay Bhattacharya and Martin Kulldorff, as well as Dr. Aaron Kheriaty and Ms. Jill Hines, in a lawsuit that has exposed an elaborate, multi-agency federal government censorship regime. Judge Doughty wrote, “The Court finds that the Complaint alleges significant encouragement and coercion that converts the otherwise private conduct of censorship on social media platforms into state action, and is unpersuaded by Defendants’ arguments to the contrary.”

UPDATE (3/21/23): Keith Bishop was kind enough to pass along a related post of his entitled "Government Censorship By Proxy?" wherein he notes:

Last week, I wrote about an unsuccessful challenge to the activities of the Office of Elections Cybersecurity within the California Secretary of State's office: Is The California Secretary of State Monitoring What You Publish Online? In that case, O'Handley v. Weber,

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