Varieties of Shareholderism: Three Views of the Corporate Purpose Cathedral
41 Pages Posted: 28 Oct 2020 Last revised: 31 Oct 2020
Date Written: October 19, 2020
This Chapter seeks to make three modest contributions by offering views of the corporate purpose cathedral that bear on the role of law in it. These views underscore the difference and the tension between an individual perspective and a societal/national legal perspective on the purpose of the corporation. First, it reviews a novel dataset on national legal shareholderism - namely, the degree to which national corporate laws endorse shareholder primacy - as an exercise in operationalizing legal constructs. Second, it anchors the two archetypal approaches of shareholderism and takeholderism in personal human values. It is this connection with the fundamental conceptions of the desirable which animates attitudes and choices in this context. The upshot is potentially subversive: Legal injunctions to directors on corporate purpose might be an exercise in futility. Third, this Chapter highlights the importance of acknowledging the tensions between the two levels of analysis by looking at the works of prominent writers. Adolf Berle, Victor Brudney, and Leo Strine have been careful to keep this distinction in mind, which has enabled them to hold multiple views of the cathedral without losing sight of it.
Keywords: corporate purpose, corporate governance, fiduciary duties, stakeholders
JEL Classification: K22
Suggested Citation: Suggested Citation