Comments on Peter C. Kostant's "Exit, voice, and loyalty in the course of corporate governance and counsel's changing role".(in this issue, p. 203)

Harvey Rishikof[*]

Roger Williams University School of Law, 10 Metacom Ave., Bristol RI 02809-5171, USA

Peter C. Kostant should be commended for his article that brings the insights of social science and economic theory to the world of corporate jurisprudence. Through the prism of Albert O. Hirschman's classic "Exit, Voice and Loyalty in the Course of Corporate Governance and Counsel's Changing Role", Kostant explores the changing nature of the role of corporate counsel as a function of the new forms of corporate governance.

In a nutshell that does not do justice to his finely articulated and nuanced argument, he traces the evolution of the role of corporate counsel, as subordinate to inside senior management under the "agency theory" of corporate governance, to the new emerging corporate governance model of enhanced power for boards of directors. Under the traditional agency theory, corporations are a "nexus of contracts" owned by "shareholders" and managed by "directors" as their agents. Under this …