(The author is a Reuters Breakingviews columnist. The opinions expressed are his own.)
By Reynolds Holding
The U.S. Supreme Court may be getting ready to shake the faith of shareholders. Company boards have a legal duty to put business interests first. Yet a challenge to the Affordable Care Act’s requirement that corporate healthcare insurance cover contraception could give biblical doctrine priority. Some laws designed to protect investors could suffer collateral damage.
The case raises the novel issue of whether for-profit corporations have religious rights under the U.S. Constitution and other federal laws. Arts and crafts chain Hobby Lobby and Conestoga Wood, a cabinet maker, say their owners’ beliefs excuse the companies from including birth control coverage in employee health plans.
Amidst the broader debate, one question is whether the firms’ boards can legally make this argument. State laws generally require company directors to enhance profit and shareholder value. They have leeway to make charitable donations, tout ideological positions and promote social objectives that have at least some business purpose. That’s why Apple AAPL.O Chief Executive Tim Cook could dismiss critics of the company’s renewable energy policies without fearing lawsuits.