Corporate Evolution

Political entrepreneurs have declared war on environmental, social, and governance policies (“ESG”), going so far as to attempt to criminalize ESG-influenced investing. They seek a return to some real or imagined past. They amplify and elevate their efforts into mainstream public discourse. They pursue extraordinary goals and tactics to disrupt and even dismantle institutional structures, norms, and established processes. The contemporary anti-ESG backlash is not simply a battle over corporate purpose and the dueling perspectives of shareholder primacy versus stakeholderism or disputes concerning sustainable investment and operational strategies. It reflects aggressive political entrepreneurship and the tension between competing narratives: stasis, reversion, and evolution. Whereas anti-ESG political entrepreneurs see stability in the past, others see corporate governance as evolving forward, albeit with occasional fluctuations. This Article contributes to the corporate governance literature advancing an evolutionary theory. It posits that the demands and expectations placed upon directors and officers must evolve with the growing complexity of the global business environment. It advances the need for incremental changes to corporate law and governance. It finds support in corporate law, modern corporate governance practices, and theory.