The Debate Surrounding the Company Purpose in the Post-Pandemic Age

Abstract

The recent COVID-19 pandemic crisis produced an extensive array of creative responses to confront its adverse results. Many companies worldwide were required to adopt innovative thinking by altering their business activities and revising their entire supply chain by attracting different types of resources delivered by various stakeholders. This Article is devoted to exploring the implications of this fundamental change on central theoretical assumptions of corporate governance. I articulate a new stakeholders-resources theory that explores governance norms as part of the firm’s quest for inputs required to generate competitive advantage. I apply this analytical framework in the debate on corporate purpose. I argue that companies have to consider the interests of diverse constituencies, as long as it affects the company’s ability to produce value as an independent and separate legal entity. Moreover, I advocate a novel contingent interpretation for formulating a purpose that acknowledges the dynamic nature of business needs and incorporates the life-cycle and the industry patterns to form an instructive tradeoff between efficiency, fairness, moral, and public policy considerations as part of understanding company’s own purpose. Consequently, our reformulation of the debate brings closer the company’s business challenges and the law and regulation governing the company’s multi-level interactions with various constituencies to address unique encounters effectively.

Keywords: Corporate Purpose, Stakeholderism, Innovation in the Post-Pandemic Age