Corporations have something to say about some of the most important social and economic issues of our time—and one way they say it is through shadow governance. This Article spotlights a group of influential corporate policies comprising what we call “shadow governance.” These non-charter, non-bylaw governance documents express a corporation’s commitment to and process on issues as wide-ranging as campaign finance, environmental sustainability, and sexual harassment, but are largely overlooked by scholars and practitioners alike. This Article addresses that gap, revealing how shadow governance documents influence corporate decision-making and corporate behavior.

This Article makes two contributions to the literature. First, it presents a descriptive account of the scope of shadow governance in the modern U.S. corporation. It analyzes a hand-collected dataset of shadow governance documents from companies listed in the Standard & Poor’s 1500 (S&P 1500) to show the array of and variation in shadow governance documents. Second, this Article uses original interviews with directors and general counsels to show how shadow governance documents influence corporate decision-making. Among other things, these documents set the board’s annual agenda, define the metes and bounds of boards’ and committees’ responsibilities, and memorialize the corporation’s values. These are all exceptionally important corporate functions that are relegated to shadow governance documents, where shareholders and other corporate outsiders have little ability to effect change.

This Article’s exploration of shadow governance documents is both theoretically and practically important. Shadow governance documents are not just poorly understood—they are also largely overlooked by scholars and practitioners. This Article’s account has the potential to open a new field for scholarly research and to provide new strategies for those who wish to influence corporate behavior.

Cathy Hwang & Yaron Nili, Shadow Governance, 108 California Law Review, 1097–1146 (2020).