For Whom is the Corporation Managed in 2020?: The Debate over Corporate Purpose

37 Pages Posted: 1 May 2020 Last revised: 6 Nov 2020

See all articles by Edward B. Rock

Edward B. Rock

New York University School of Law; European Corporate Governance Institute

Date Written: May 1, 2020


A high profile public debate is taking place over one of the oldest questions in corporate law, namely, “For whom is the corporation managed?” In addition to legal academics and lawyers, high profile business leaders and business school professors have entered the fray and politicians have offered legislative “fixes” for the “problem of shareholder primacy.” In this article, I take this debate to be an interesting development in corporate governance and try to understand and explain what is going on. I argue that, analytically and conceptually, there are four separate questions being asked. First, what is the best theory of the legal form we call “the corporation”? Second, how should academic finance understand the properties of the legal form when building models or engaging in empirical research? Third, what are good management strategies for building valuable firms? And, finally, what are the social roles and obligations of large publicly traded firms? I argue that populist pressures that emerged from the financial crisis, combined with political dysfunction, have led to the confusion of these different questions, with regrettable results.

Keywords: corporate law, takeover law, corporate governance law, law & finance, securities law, corporate social responsibility, hedge fund activism

JEL Classification: K20, K22, M14, N20, N22, G30, G34

Suggested Citation

Rock, Edward B., For Whom is the Corporation Managed in 2020?: The Debate over Corporate Purpose (May 1, 2020). European Corporate Governance Institute - Law Working Paper No. 515/2020, NYU School of Law, Public Law Research Paper No. 20-16, NYU Law and Economics Research Paper , Available at SSRN: or

Edward B. Rock (Contact Author)

New York University School of Law ( email )

40 Washington Square South
New York, NY 10012-1099
United States

European Corporate Governance Institute ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels

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