Measurability as a Poor Criterion for Corporate Law

This paper was presented at a conference on criteria for determining good laws of business association co-sponsored with the Berkeley Business Law

Dreams are useful. Dreams can inspire people to achieve what they otherwise would not achieve and to endure what they otherwise could not endure. Without dreams, we might never have developed democracy, penicillin, or the electric toothbrush. Dreams also are sometimes dangerous. Consider the case of Belgian shoemaker Vincent De Groof. De Groof dreamed of flying, and built a machine with wings that flapped like a bird's. In 1874, De Groof arranged for a hot air balloon to carry him aloft in his ornithopter and release him in mid-air. Sadly, De Groof's dream of flight proved only a dream. He fell his death. Something similar, if less fatal, happened to many of us in the corporate world in the 1980s and 1990s. Our dangerous dream was not the dream of flight. Rather, it was the dream of finding a single objective, accurate, easy-to-observe criterion for corporate performance that could be used to gauge the quality of law and practice.