Commercial speech in context: How new institutionalism and encapsulated trust should guide corporate discourse.

摘要

This thesis examines the importance of institutional contexts to understanding the appropriate scope of corporate speech rights and disclosure obligations.;In particular, the thesis examines whether a New Institutional approach to understanding corporate speech rights could avoid an otherwise inevitable jurisprudential collision between the United States Supreme Court's commercial speech doctrine and its disparate approach to corporate political speech. The problem arises because corporations are attempting to escape regulation or liability in a variety of settings by investing commercial messages with just enough political content to render the amalgam of politically tinged corporate speech fully protected under the First Amendment. Why would this strategy work? If corporate speech is political, existing Supreme Court jurisprudence suggests that government should play no role in regulating the speech, regardless of its truth or falsity. In contrast, if the corporate speech is commercial, the commercial speech doctrine permits governmental regulation to ensure consumers and investors receive truthful information. Unfortunately, the Supreme Court has never articulated sufficiently clear definitions of "commercial" or "political" speech, or the boundaries between them, to address claims of politically tinged corporate speech. This dichotomy in the Supreme Court's approach creates a perverse incentive for corporations to engage in an artful alchemy of mixing just enough political content with otherwise commercial disclosures to gamer the most stringent constitutional protection. As corporations practice that alchemy with increasing frequency, the integrity of a wide array of regulatory regimes faces potential constitutional attack.;As a springboard for analysis, the thesis uses the United States securities regulation regime. That set of laws, regulations, and rules essentially operates through content-based regulation of compelled speech, which often touches inherently political matters. To the extent corporations could claim protection from regulation under the First Amendment for politically tinged commercial speech, the vast securities regulation regime would seem constitutionally infirm. The thesis suggests that a New Institutional approach to understanding the contours of the First Amendment would insulate the securities regulation regime from constitutional assault. Moving beyond that particular regulatory setting, the thesis constructs a comprehensive philosophical and methodological framework for a New Institutional approach to corporate speech jurisprudence that courts could actually adopt as cases of politically tinged corporate speech arise in other institutional contexts.;Turning from speech rights to disclosure obligations, the thesis assesses whether using the philosophy of "encapsulated trust" as the basis for a fiduciary duty of disclosure could improve the integrity and effectiveness of corporate communications. The question arises because a tragedy of transparency threatens the viability of the burgeoning corporate social responsibility ("CSR") movement, where consumers and investors employ various social, environmental or ethical screening criteria before purchasing a company's stock or products. In an efficient market, fully informed consumers and investors could reward companies that engage in CSR by purchasing their products or stock and, conversely, punish companies that fail to engage in desired practices by refusing to purchase their products or stock. Unfortunately, corporations are increasingly engaging in a sort of "strategic ambiguity" in their public communications---an ambiguity made possible by a variety of static yet inconsistent standards regarding the collection, auditing and dissemination of information regarding CSR practices. Consumers and investors simply cannot trust the existing disclosure regime to provide reliable information necessary to monitor CSR compliance. That lack of trust will cause the market for corporate social responsibility to collapse, as consumers and investors stop offering rewards for responsible business behavior.;The thesis suggests solving that disclosure tragedy by reshaping the existing fiduciary duties governing officers and directors around the philosophy of "encapsulated trust." In simple terms, encapsulated trust constitutes a rational expectation that others will take our interests into account when determining what course of action to pursue. Applied in the context of corporate disclosures on CSR, encapsulated trust would require officers and directors to demonstrate they took into account shareholder preferences regarding the timing, content, and form of corporate disclosures. In essence, the duty is a process based standard that relies on continual discourse to improve the integrity of disclosure practices. In contrast to static statutory disclosure rules, an emphasis on improved discourse between the corporations and shareholders would promote greater efficiency in corporate communication by attending more accurately to evolving consumer and investor disclosure preferences.;By developing a New Institutional approach to corporate speech and by applying the philosophy of encapsulated trust to corporate disclosure obligations, it becomes clear that attending to context remains essential to understand the appropriate scope of corporate speech rights and disclosure obligations.