Social Norms and Social Roles

Abstract

Corporate law serves both tofacilitate and to regulate the conduct of corporate enterprise. Insofar as corporate law is regulatory, it provides i tives and disincentives to the major actors in the corporate enterprise?d tors, officers, and significant shareholders?through the threat of liab In significant part, however, these actors are motivated not by the desir avoid liability, but by the prospect of financial gain, on the one hand by social norms, on the other. Much work has been done on the way in w these actors are motivated by the threat of liability and the prospect of f cial gain, but relatively little work has been done on the operation of norms. The purpose ofthis Article is to illuminate both corporate law sp cally, and the interrelation of law and social norms generally, by stud the ways in which that interrelation operates in the field of corporate The Article begins by describing three kinds of social norms?behavioral terns, practices, and obligational norms?and considering the origins effects of social norms. It then examines the critical role of social nor several central areas of corporate law: fiduciary duties (specifically, care loyalty), corporate governance (specifically, board composition and the r institutional investors), and t