On 'Prosperity' by Colin Mayer: Brief Critical Remarks on the (Legal) Relevance of announcing a Multi-Stakeholders 'Corporate Purpose'

Abstract

In this short essay, written for a recent conference, I discuss critically the value of announcing in the corporate bylaws or other documents generic corporate purposes. I submit that these formulas - let them be inspired by shareholders or stakeholders primacy - are of little legal consequence. The discussion is largely based on the proposals made by Professor Colin Mayer in a recent book ("Prosperity: Better Business Makes the Greater Good, Oxford, 2018), but covers more broadly the issue of the relvance and importance of similar solutions. I also underline the dangers hiding in plain sight of putting too much faith in private ordering proclamations of a "corporate purpose" or of a set of values, especially when this is apparently laudable from an ethical and social perspecitve and evokes a multitude of stakeholders and broad interests. Doing so, in fact, enhances and broadens directors' and executives' discretion and powers; and might offer arguments to those who intend to undermine much-needed mandatory regulations. In this perspective, I express similar reservations for both stakeolders and shareholders primacy, formulas that practically are often little more than vague aspirations, with hardly any real, concrete impact on the law in action.

Keywords: Stakeholders' Primacy, Shareholders' Primacy, ESG, Corporate Governance, Corporate Purpose

JEL Classification: K22