Academic journal article Washington and Lee Law Review

Overcoming Resistance to Diversity in the Executive Suite: Grease, Grit, and the Corporate Promotion Tournament

Academic journal article Washington and Lee Law Review

Overcoming Resistance to Diversity in the Executive Suite: Grease, Grit, and the Corporate Promotion Tournament

Article excerpt

I. Interdisciplinary Prospects

The dominant strains of corporate governance theory are far removed from the scholarship in employment and discrimination law. The two fields occupy distant workspaces and almost never talk to each other. The principal reason is that most corporate legal scholars have deliberately defined their field so that it addresses only a single, if crucial, subject: the allocation of control over firms between managers and suppliers of capital-investors.1 So restricted, the field leaves to others the task of thinking about the legal relationships between the firm and other stakeholders, including those who supply its labor.

Some corporate scholars chafe under this restricted vision and seek to redefine the boundaries of corporate law so as to encourage2-or in some cases even require3-the board of directors to take into account the interests of employees, bringing employment law and corporate law into closer contact. But their project has yet to gain anything close to the upper hand. Some of the resistance is no doubt ideological-there is a strong conservative streak within the community of corporate scholars, and many of the critics of the narrow vision of corporate law have an openly progressive agenda. I suspect, though, that others fear that the field will lose its intellectual specialty if it expands too far in the direction of open-ended constructs like "team production"4 or "connected contracts."5 Yet regardless of the eventual scholarly consensus on whether corporate law should shift away from exclusive attention to investor interests, the corporate theory informing that inquiry uses a much wider-angled lens. Economists, whose ideas orthodox corporate law scholars habitually borrow, certainly have no similar self-imposed limits on their interests. "Theory of the firm" work translates into a strong interest in employment contracts and structural relationships, resulting in a melding of economics and human resources.6 Economists studying the principal-agent problem have long been interested in institutional arrangements that optimize the efficiency and productivity of the firm, something hardly limited to the resolution of conflicts between managers and investors.

Since the early 1970s, work in corporate law has closely followed the interests of the economists, and it continues to follow in this direction.7 Having gained some fluency with more expansive ideas about how firms are organized, scholars who think of themselves as "corporate" are seeing connections to other legal disciplines and are applying their skills and insights to problems in the borderland. I suspect that this expansion of interests will gradually transform "scholarship of the firm." Following the lead of corporate scholars like Margaret Blair, more attention will be paid to institutional arrangements-both contract and legal design-that facilitate productivity through more sophisticated approaches to human resources within organizations.8 We already see some signs of this increased attention in work on "virtual corporations"9 and in David Millon's exploration of employment security inside the firm.10 Stephen Bainbridge's writing on the connections between corporate decisionmaking and participatory workgroup arrangements11 is another nice inquiry into this type of issue, as is-in a very different direction-research by Stewart Schwab and Randall Thomas on the exercise of shareholder voting rights by labor unions and pension plans.12

This Article follows in that spirit. Once we open the corporate governance/human resources nexus to deeper inquiry, mutual scholarly interest in diversity and discrimination follows naturally.13 Firms have complex motives to take nondiscrimination and the promotion of diversity seriously. First, at least certain forms of discrimination are both unlawful and socially illegitimate and hence present threats of potential liability and injury to reputation. Second, human resources demands are such that attracting and motivating a diverse workforce is a competitive imperative. …

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