Document ID: ./input/supremecourt_opinions/opinions/boundvolumes/558bv.pdf
Page Number: 638

Cite as: 558 U. S. 310 (2010) 

477 

Opinion of Stevens, J. 

how  this  addresses  the  concerns  of  dissenting  union  mem­
bers, who will also be affected by today’s ruling, and I fail to 
understand  why  the  Court  is  so  conﬁdent  in  these  mecha­
nisms.  By  “corporate  democracy,”  presumably  the  Court 
means the rights of shareholders to vote and to bring deriva­
tive suits for breach of ﬁduciary duty.  In practice, however, 
many  corporate  lawyers  will  tell  you  that  “these  rights  are 
so  limited  as  to  be  almost  nonexistent,”  given  the  internal 
authority wielded by boards and managers and the expansive 
protections afforded by the business judgment rule.  Blair & 
Stout  320;  see  also  id.,  at  298–315;  Winkler,  32  Loyola  (LA) 
L.  Rev.,  at  165–166,  199–200.  Modern  technology  may  help 
make it easier to track corporate activity, including electoral 
advocacy, but it is utopian to believe that it solves the prob­
lem.  Most  American  households  that  own  stock  do  so 
through  intermediaries  such  as  mutual  funds  and  pension 
plans, see Evans, A Requiem for the Retail Investor? 95 Va. 
L.  Rev.  1105  (2009),  which  makes  it  more  difﬁcult  both  to 
monitor and to alter particular holdings.  Studies show that 
a majority of individual investors make no trades at all dur­
ing a given year.  Id., at 1117.  Moreover, if the corporation 
in  question  operates  a  PAC,  an  investor  who  sees  the  com­
pany’s  ads  may  not  know  whether  they  are  being  funded 
through the PAC or through the general treasury. 

If and when shareholders learn that a corporation has been 
spending  general  treasury  money  on  objectionable  election­
eering,  they  can  divest.  Even  assuming  that  they  reliably 
learn  as  much,  however,  this  solution  is  only  partial.  The 
injury to the shareholders’ expressive rights has already oc­
curred; they might have preferred to keep that corporation’s 
stock  in  their  portfolio  for  any  number  of  economic  reasons; 
and they may incur a capital gains tax or other penalty from 
selling their shares, changing their pension plan, or the like. 
The  shareholder  protection  rationale  has  been  criticized  as 
underinclusive, in that corporations also spend money on lob­
bying and charitable contributions in ways that any particu­