When it comes to Georgia’s voting law, keep politics out of business
The controversial Georgia election law bill, SB 202, is 96 pages long. It spans 2,474 lines, consisting mostly of dense legalese. At 30,000 words, it’s slightly shorter than a novella and infinitely more tedious. A competent parsing by someone like me, a lawyer and law professor, would take a couple of weeks.
Summaries of the gargantuan bill point in several directions, naturally, for it attempts to completely redefine the administration of statewide voting rules. In one direction, the bill stresses promoting integrity and banning intimidation, as its supporters underscore; in another, it contains so many regulations so intricately that I can readily imagine the oppressive enforcement that critics perceive.
On balance, as between its petition for integrity and its potential for oppression, I would oppose the bill. Yet my opinion does not matter, not least because I am not a citizen of Georgia but also because I am just one voice without any particular authority on the topic of voting laws. What I do know about, however, is corporate life and law and it’s in that spirit that I offer my perspective to refashion prevailing debate along more sober lines.
In today’s cacophonous debate, one often-heard issue is whether business should stay out of politics. Reasonable people are differing on that, understandably. Less heard but more important is this imperative: that politics stay out of business. For all their differences, President Joe Biden and Senator Mitch McConnell share a bad habit: pushing politics onto business.
Biden is sure the Georgia bill amounts to voter suppression while McConnell is sure the same bill promotes voting integrity. Both lifelong politicians hectored private corporations to do their bidding. Biden expressed support for business leaders, such as the CEOs of Georgia-based Coca-Cola and Delta, that condemned it; McConnell threatened to sanction corporations who speak against it.
Some corporate leaders expressed prideful duty in criticizing the bill, issuing corporate press releases or signing group statements. On the other hand, some signatories may have been acting under pressure while most companies stayed on the sidelines of what’s widely seen as an “impossible” or “no-win” situation for the private sector. After all, business organizations are neither equipped nor elected to resolve political battles.
Business leaders are fully entitled to express their views on political issues and pending legislation. But politicians should not pressure them to do so. Politicians, who are not elected to be business leaders, would do well to embrace the “business judgment rule.” This basic and ancient corporate law principle of restraint requires deference to business leaders over their decisions.
Whether or not to take a stand on pending legislation is a business decision — a decision Coca-Cola might make regarding soda tax legislation or Delta over mandatory COVID-19 testing for passengers. Under the business judgment rule, every judge in America would respect whatever managerial decision a corporation takes on those bills as well as the controversial voting bill. The political class should have as much dignity and restraint.
Meanwhile, corporate officials uncertain of how to read dense voting bills, or weigh in on them, can consult law’s “political question doctrine.” Another venerable rule of restraint, this requires deference to political leaders on most contentious matters of social policy. Certain powers can only be exercised by the executive or legislative branches of government and courts refrain from opining on them.
For example, courts defer to the President of the United States on administering diplomatic relations with oppressive countries such as China and Cuba. They defer to the Senate to determine the timing and manner of its presidential impeachment trials — their prerogative.
Following the same logic, voting rights in the United States belong to individuals, not corporations. Corporations may therefore rightly defer to the people, including not only their own shareholders, employees and customers, but the rest of the polity as well.
When corporations do exercise their right to speak, it may help to appreciate that not all corporate actors speak with the same authority. For instance, directors have no authority to speak for their corporations, while CEOs only have such authority as the board of directors grants. Accordingly, if companies want to take a stand — for or against a bill — the way to do so is by board resolution. Otherwise, CEOs speaking should stress that they are speaking as citizens, not corporate officials.
If politicians respect the business judgment rule, America’s corporate boards can weigh the interests of the corporation and its constituents in an atmosphere of rationality, free of political hurly-burly. In this way, corporations no longer would be faced with an impossible lose-lose situation. With the civic temperature lowered, people may even find the time to parse and intelligently discuss complicated legislation rather than exchange political heat.
Lawrence A. Cunningham is the Henry St. George Tucker III Research Professor and Director of the Quality Shareholders Initiative at The George Washington University Law School.
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