Corporate Ordering: How Corporations Navigate Social Conflict with Stavros Gadinis
Episode Summary
In the autumn of 2023, as war broke out between Israel and Hamas, a team inside Meta had to decide post by post — in real time — which images of the conflict billions of people would see. A year later, after the killing of a United Healthcare CEO on a Manhattan sidewalk, the country found itself arguing about something far less visible: the algorithms deciding which insurance claims get paid. Neither was a political decision in the usual sense. Both were business decisions — content moderation, claims processing — and both turned out to be social policy made at a scale no legislature could match.
So who should make these calls, and how? Shareholders cannot tell us because shareholders no longer agree on anything. Stakeholder theory cannot tell us either, because it names the interests without telling us how to weigh them. And yet some of the world's leading companies have quietly built machinery for exactly this problem — with rules, procedures, and review borrowed from the way governments work.
In this episode, host Matteo Gatti (Professor of Law at Rutgers Law School and author of Corporate Power and the Politics of Change) sits down with Stavros Gadinis (UC Berkeley School of Law), whose new book Corporate Ordering: How Corporations Navigate Social Conflict argues that corporations have become some of the most important places where our societies work through their conflicts — and that corporate law has barely noticed.
Stavros Gadinis is the George R. Johnson Professor of Law at UC Berkeley School of Law and Faculty Director of the Berkeley Center for Law and Business, and a Research Member of ECGI. His prior work with Amelia Miazad on corporate law and social risk, and with Christopher Havasy on what public law can teach corporate governance, has shaped how scholars think about corporate legitimacy. His new book is Corporate Ordering: How Corporations Navigate Social Conflict (Cambridge University Press, 2026). His SSRN author page is at https://ssrn.com/author=591462.
Matteo Gatti (Host) is Professor of Law at Rutgers Law School, where he writes on corporate power, governance, and political economy. He is a Research Member of ECGI and the host of this podcast.
Key Topics Covered
What Corporate Ordering Is — and Why It Is Different from CSR and ESG Gadinis opens by distinguishing his framework from its predecessors. Corporate social responsibility treated social engagement as peripheral — a library donation alongside the main business. ESG brought social concerns closer to the core but remained a debate about ends: should we maximise profits or consider stakeholders? Corporate ordering leaves that debate behind. It focuses on process — the decision-making machinery through which companies navigate issues that are not peripheral but central to their business models. The question is not what corporations should optimise for, but how they actually get to a decision, and whether that process is rigorous enough to be trusted.
Why Shareholder Primacy Cannot Answer the Hard Questions The fracture among shareholders — between Norwegian sovereign wealth funds with ESG mandates and red-state anti-ESG funds — is emblematic of a deeper problem. Even within companies, there are genuine disagreements about the right business approach. How much should an AI company invest in safety versus speed? How should a social platform set its content moderation boundaries? Shareholder primacy can tell you that you cannot give the company away, but it cannot tell you which path leads to profitability. It provides discretion without guidance. Gadinis draws the analogy with M&A law before Smith v. Van Gorkom in 1985: boards thought they could meet for an hour and a half, decide a price, and sell the company. Since then, a whole machinery of fairness opinions, due diligence, independent committees, and majority-of-the-minority votes has been built to support the exercise of that discretion. We are at a similar moment for social conflict decisions.
The Architecture of Corporate Ordering: Rulemaking, Implementation, and Monitoring Drawing on public law's separation of powers, Gadinis identifies three functions that a well-designed corporate ordering regime must perform. The first is rulemaking: identifying the company's core principles, reaching out to impacted parties, and collecting information about how decisions will reverberate. This does not obligate the company to any particular outcome, but being informed changes how it thinks about the problem. The second is implementation: taking specific decisions about specific products or situations, in a way that is transparent and reasoned — connecting each decision back to the principles established at the rulemaking stage and creating a platform for engagement with investors, stakeholders, and regulators. The third is monitoring: a robust feedback loop that checks whether the company is actually living up to its commitments, using internal mechanisms where they are sufficient, and external ones where they are not. Gadinis' case studies show that when all three functions are present, the policy works; when one is missing, there is almost always a gap.
The Three Case Studies: Rideshare, Climate, and Artificial Intelligence The heart of the book is three case studies chosen by design as success stories — because successes reveal what makes failures legible. The Facebook Oversight Board, Gadinis notes, is the counterexample he chose not to study.
The rideshare example centres on three Post-it notes stuck to an insurance broker's wall — a three-part framework distinguishing liability periods that California and dozens of other states subsequently wrote into law. The broker was not thinking about changing the law; she was thinking about actuarial risk. Yet the company's process of working through the problem produced the first draft of a regulatory category that now governs an industry.
The AI example raises the stakes considerably. When Google DeepMind's AlphaFold risked being used for biological weapons, the company convened experts from philosophy, chemistry, and national security to reach its decision — a genuine rulemaking function. By contrast, Matteo describes the September 2026 White House Accord on superintelligence — a morally binding voluntary commitment signed by frontier AI labs and praised by the President as "a constitution." Gadinis' assessment of the Accord against his own framework is measured but clear: it contains the beginnings of internal control machinery, identifies specific risks, and mentions an independent auditor — but the rulemaking function is almost entirely absent, there are no consultation requirements, and the monitoring mechanism has no independence protections, no public reporting requirements, and no whistleblower protection. It is a step in the right direction, but not nearly enough.
The Historical Pattern: From Traffic Codes to Securities Disclosure Gadinis traces two historical precedents, at the prompting of his SJD supervisor Howell Jackson. The first is the modern traffic code, which began with a genuine need — people were dying in car accidents — and was ultimately captured by an industry coalition that produced rules leaning more heavily on car interests than on pedestrian ones. The second is stock exchange disclosure, which was incorporated into the Securities Act of 1933 after originating in private exchange practice. The lesson is not that corporate ordering is inevitably self-serving, but that the process through which it happens predicts the direction of the outcome. Gadinis wants to bring analytical rigour to that process so we can tell good corporate lawmaking from self-interested regulatory capture.
Founder Control and the Limits of the Framework Matteo raises the obvious structural challenge: most of the leading AI companies are founder-controlled, insulated from the shareholder accountability mechanisms that the corporate governance machine normally provides. Gadinis' response is nuanced. Not all founder-controlled firms behave the same way. Google DeepMind — also founder-controlled — has built one of the most comprehensive corporate ordering regimes precisely because the founders believe it serves the business. Meta, under Zuckerberg, has the opposite view of the business model, and there is currently no lever to force different thinking. The question is whether there should be one.
Toward a New Standard of Conduct Gadinis' final chapter moves from description to prescription. He argues that if we are serious about the value of this process — and if we accept that in many fields corporations are the only actors capable of doing this work — then deliberation about social conflict should become a new element of the duty of care. Directors must deliberate about whether an issue carries social weight, and if the process is entirely absent or very thin, there should be legal consequences. Crucially, Gadinis proposes not damages but what he calls recalibration: a court order requiring the missing deliberations, or a deferred board vote. The logic is that going through the steps generates information the company did not have before — as illustrated by Uber's sexual assault reporting policy, where victims' groups convinced the company that anonymity served survivors better than mandatory disclosure to authorities, at significant legal and regulatory cost to Uber. That kind of information cannot be obtained any other way.
The Hardest Objection: Private Government Matteo closes with the deepest challenge: even if corporate ordering produces better first drafts of regulation, the democratic authorization problem remains. Wall Street has always been the drafter of financial regulation, and the result has consistently leaned toward industry interests. The AI industry is currently arguing that regulators should not touch them at all — which is a very different posture than Gadinis' portrait of companies voluntarily building better processes. Gadinis' response is that necessity is the guiding principle: regulators are so far behind the frontier that we have to work with what companies produce, while scrutinising the process through which they produced it. Both he and Matteo are writing for the critical space between the first draft and the statute — and both agree that what happens there matters enormously.
Links
- Corporate Ordering: How Corporations Navigate Social Conflict by Stavros Gadinis (Cambridge University Press, 2026)
- Corporate Power and the Politics of Change by Matteo Gatti (Cambridge University Press, 2025)
- Corporate Law and Social Risk, Stavros Gadinis & Amelia Miazad, 73 Vanderbilt Law Review 1401 (2020)
- The Quest for Legitimacy: A Public Law Blueprint for Corporate Governance, Stavros Gadinis & Christopher Havasy, 57 UC Davis Law Review 1581 (2024)
- Regulatory Entrepreneurship, Elizabeth Pollman & Jordan Barry, 90 Southern California Law Review 383 (2017)
- Private Government: How Employers Rule Our Lives, Elizabeth Anderson (Princeton University Press, 2017)
Related Podcasts
- Dissecting the Architecture of Corporate Power with Elizabeth Pollman – ep. 10 in Corporate Power and the Politics of Change with Matteo Gatti
- Corporate Governing and Shareholder Voice with Jill Fisch and Tim Smith – ep. 3 in Corporate Power and the Politics of Change with Matteo Gatti
- Full podcast series: Corporate Power and the Politics of Change with Matteo Gatti | ECGI
Corporate Power and the Politics of Change is an ECGI podcast. All episodes are available on the ECGI website and wherever you listen to podcasts, including YouTube.
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