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Michigan Law Review



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David Skeel, Icarus in the Boardroom, corporate scandal


This Review describes David Skeel's account of corporate scandal and evaluates his policy recommendations in his recent book, Icarus in the Boardroom. It argues that although the book provides a compelling history of corporate scandal, its focus on federal responses to scandal--from the enactment of the Interstate Commerce Act to the Sarbanes-Oxley Act--misses an important part of the story. As corporate law scholars have long pointed out, corporations exist within a network of constraints, based in part on law and in part on markets, norms, and other non-legal sanctions. Because it omits any sustained discussion of the reaction of these other sources of constraint, focusing instead on the federal reaction, Icarus in the Boardroom is largely incomplete as a history of scandal and reaction. A comprehensive account requires a more thorough treatment of other corporate constraints, beginning--this Review argues--with state corporate law. State courts have long engaged the problem of productive versus destructive risk that motivates Skeel's analysis. Moreover, this Review argues, the flexibility and interpretive suppleness of state corporate law jurisprudence may be better suited to respond to the problems Skeel identifies than a central, typically federal, regulator.