Protecting long-term commitment: legal and organizational means

Levillain, Kevin; Parker, Simon; Ridley-Duff, Rory; Segrestin, Blanche; Veldman, Jeroen; Willmott, Hugh

Abstract

Growing attention is being paid to the benefits of considering the long-term interests of multiple constituencies in corporate governance. A theory of the corporation where fiduciary duties of directors point to the legal entity and not to its shareholders goes beyond a pure prioritization of shareholders’ interests. However, the notion that board members mediate the interests of all constituencies fails to account for a ‘positive’ conception of corporate purpose and underlying asymmetries in allocations of rights between stakeholders. Addressing corporate governance as a fundamentally ‘open’ model for organizational structuring, we engage with a variety of legal mechanisms that can be used to implement and protect a positive purpose for the modern corporation and to protect the conditions of credible commitment to manage the company for the interest of corporate constituencies, to commit the corporation to a social or environmental purpose and to take into account multiple time-horizons.

Citation

Levillain, K., Parker, S., Ridley-Duff, R., Segrestin, B., Veldman, J., & Willmott, H. (2018). Protecting long-term commitment: legal and organizational means. In C. Driver, & G. Thompson (Eds.), Corporate Governance in Contention, 42-65. Oxford University Press. doi:10.1093/oso/9780198805274.003.0003

• Acceptance Date: Jul 4, 2018
• Online Publication Date: Jul 4, 2018
• Publication Date: Jul 4, 2018
• Deposit Date: Dec 10, 2018
• Publisher: Oxford University Press
• Pages: 42-65
• Edition: 1st
• Book Title: Corporate Governance in Contention
• Chapter Number: 3
• ISBN: 9780198805274
• DOI: https://doi.org/10.1093/oso/9780198805274.003.0003
• Public URL: https://nottingham-repository.worktribe.com/output/1221754
• Publisher URL: http://www.oxfordscholarship.com/view/10.1093/oso/9780198805274.001.0001/oso-9780198805274-chapter-3