Shlensky v. Wrigley
|Shlensky v. Wrigley|
|Citation(s)||237 N.E. 2d 776 (Ill. App. 1968)|
Shlensky v Wrigley, 237 NE 2d 776 (Ill. App. 1968) is a leading US corporate law case, concerning the discretion of the board to determine how to balance the interests of stakeholders. It represents the shift in most states away from the idea that corporations should only pursue shareholder value, seen in the older Michigan decision of Dodge v Ford Motor.
The Chicago Cubs’ president refused to install field lights for night games at Wrigley Field. "Plaintiff allege[d] that Wrigley ha[d] refused to install lights, not because of interest in the welfare of the corporation but because of his personal opinions 'that baseball is a 'daytime sport' and that installation of lights and night baseball games will have a deteriorating effect upon the surrounding neighborhood'." This meant that night games could not go ahead, and so, in the view of Shlensky, would result in lower profits for shareholders. A challenge was brought by shareholder Schlensky against the directors' decision.
The Court affirmed the director’s decision. The president was not liable for failing to maximize returns to shareholders. It was,
|“||not satisfied that the motives assigned to [the directors] are contrary to the best interests of the corporation and the stockholders… [because they] showed no fraud, illegality or conflict of interest in making that decision.
[Citing Davis v Louisville Gas and Electric Co, 16 Del. Ch. 157 (1928)] ...the directors are chosen to pass upon such questions and their judgment unless shown to be tainted with fraud is accepted as final. The judgment the directors of the corporation enjoys the benefit of a presumption that it was formed in good faith, and was designed to promote the best interests of the corporation they serve.
- Shlensky v. Wrigley, 237 N.E.2d 776, 778 (Ill. 1968).
- Choper, Coffee and Gilson, Cases and Materials on Corporations (2010)