Professor Kent Greenfield

International perspectives regarding board diversity and group decisions, corporations and global human rights and codetermination

The first topic covered will be the implication of the current behavioral economic research on the nature of group decision making. It looks increasingly like the behavioral economists are discovering the benefits of diverse and pluralistic groups. The perils of groupthink are severe in boardrooms, and we are now discovering the structural mechanisms to avoid them. This research is particularly important for corporate boards, since the comparative advantage of the corporate structure is a group decision maker at the top, but the board is often quite homogeneous in terms of race, gender, class, and perspective.

The second topic will be the increasing role of corporations in the discussion about global human rights. Many violations of human rights are committed by the hands of, or for the benefit of, industrial and business interests. The United Nations has now recognized the obligation of private corporations to acknowledge their role in this space. In the United States, one avenue of possible litigation (the use of the Alien Tort Claims Act) is shutting down, while others are opening up (the use of ultra vires suits).

The third topic will cover codetermination, or more broadly, recognizing employee interests within corporate governance. In the US the law of corporate governance is among the most politically conservative and least democratic in the developed world. The European model of corporate governance requires much more robust social obligation on the part of corporations, embodied not only in cultural norms but also in law. The duty to disclose information and consult with employees is much more robust, and many large European companies include labor representatives on their boards. Germany and at least 15 other European countries have some kind of provision requiring worker representation on boards of companies. The efforts to include employees in company governance are intended to embody norms of workplace democracy and economic fairness, but they are also seen as an important component of economic success, and indeed Germany is now the economic powerhouse of Europe. Are there elements of the European model the US should import or convert to use in the US?