Edited by Kleio Akrivou and Alejo José G Sison
Chapter 10: Corporations, politics and the common good
The way we think determines the way we will act. The way we conceive of a corporation will have profound implications for how we govern it. Current corporation theory is dominated by private-law conceptions of the corporation, whether rooted in contract or property law. Such a conception orients corporate governance towards private, rather than common, goods. Yet corporations, especially publicly traded ones, are public entities. Ontologically they are more similar to political institutions than private relationships. This chapter argues public constitutional law is a more appropriate hermeneutic for understanding the corporation than contract or property law. Consequently the chapter applies Aristotelian political philosophy to the corporate enterprise, arguing that the corporation is one of the many imperfect societies that comprise the perfect society of the polis. As an imperfect society, the corporation has as its end a common good, albeit an imperfect one. After exploring the nature of this corporate common good, the chapter concludes that, rather than being governed solely for the private good of shareholder wealth maximization, corporations should be governed for the common good of the corporation in a manner oriented to the complete common good of the perfect society of which the corporation is a part.
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