The Role of the Corporation in Society: An Alternative View and Opportunities for Future Research

27 Pages Posted: 28 May 2013 Last revised: 9 Jun 2014

George Serafeim

Harvard University - Harvard Business School

Date Written: May 27, 2013

Abstract

A long-standing ideology in business education has been that a corporation is run for the sole interest of its shareholders. I present an alternative view where increasing concentration of economic activity and power in the world’s largest corporations, the Global 1000, has opened the way for managers to consider the interests of a broader set of stakeholders rather than only shareholders. Having documented that this alternative view better fits actual corporate conduct, I discuss opportunities for future research. Specifically, I call for research on the materiality of environmental and social issues for the future financial performance of corporations, the design of incentive and control systems to guide strategy execution, corporate reporting, and the role of investors in this new paradigm.

Keywords: corporate performance, corporate size, sustainability, corporate social responsibility, accounting

JEL Classification: G3, K2, M1, M2, M3, M4, M5

Suggested Citation

Serafeim, George, The Role of the Corporation in Society: An Alternative View and Opportunities for Future Research (May 27, 2013). Available at SSRN: https://ssrn.com/abstract=2270579 or http://dx.doi.org/10.2139/ssrn.2270579

George Serafeim (Contact Author)

Harvard University - Harvard Business School ( email )

381 Morgan Hall
Boston, MA 02163
United States

HOME PAGE: http://drfd.hbs.edu/fit/public/facultyInfo.do?facInfo=ovr&facId=15705

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