Ascertaining the Corporate Objective: An Entity Maximisation and Sustainability Model

Modern Law Review, Vol. 71, p. 663, 2008

49 Pages Posted: 20 Jul 2011

See all articles by Andrew R. Keay

Andrew R. Keay

University of Leeds - School of Law

Multiple version iconThere are 2 versions of this paper

Date Written: February 1, 2008

Abstract

Public companies play crucial roles in today’s world, and it has been acknowledged that ascertaining the objective of such companies is a critical issue. However, there remains great uncertainty as to what that objective should be. This article examines the two predominant theories that have been propounded as the corporate objective, namely the shareholder primacy and stakeholder theories. This is followed by an explanation of, and the case for, a new model, the entity maximisation and sustainability model. This model focuses on the company as a separate legal entity and maintains that the objective of the company is to maximise the wealth of the entity as an entity and, at the same time, to ensure that the company is sustained financially.

Keywords: Company, corporation, corporate objective, shareholder primacy, stakeholder theory, directors

JEL Classification: G30, K20, K22, L20

Suggested Citation

Keay, Andrew R., Ascertaining the Corporate Objective: An Entity Maximisation and Sustainability Model (February 1, 2008). Modern Law Review, Vol. 71, p. 663, 2008. Available at SSRN: https://ssrn.com/abstract=1889236

Andrew R. Keay (Contact Author)

University of Leeds - School of Law ( email )

Corporate and Commercial Law
Leeds LS2 9JT
United Kingdom
0113-343-6389 (Phone)

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
1,295
Abstract Views
3,378
rank
15,232
PlumX Metrics