Protecting long-term commitment: legal and organizational means

LEVILLAIN, Kevin, PARKER, Simon, RIDLEY-DUFF, Rory, SEGRESTIN, Blanche, VELDMAN, Jeroen and WILLMOTT, Hugh (2018). Protecting long-term commitment: legal and organizational means. In: DRIVER, Ciaran and THOMPSON, Grahame, (eds.) Corporate governance in contention. Oxford, Oxford University Press, 42-65.

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The idea that corporations exist solely for the benefit of their shareholders has been termed ‘one of the fundamental fault lines of our economic model’ (Purpose of the Corporation Project, 2015). The ‘fault’ with shareholder primacy thinking is registered in broad evidence that the dominant corporate governance framework encourages excessive short-term risk-taking, and so detracts from long-term investment strategies, including research and development. This has adverse effects on future profitability and resilience with regard to the mitigation of systemic risks. To address this situation, we firstly argue that there is a ‘business case’ for engagement with environmental, social and governmental (ESG) issues, and secondly, that there is, in principle, no legal obligation for directors to focus exclusively on the maximization of shareholder value.

Item Type: Book Section
Additional Information: This chapter is part of an edited edition of works questioning the status quo on corporate governance and corporate law.
Uncontrolled Keywords: corporate governance, fairshares, social enterprise, law
Research Institute, Centre or Group - Does NOT include content added after October 2018: Sheffield Business School Research Institute > Ethical Organisations
Departments - Does NOT include content added after October 2018: Sheffield Business School > Department of Management
Identification Number:
Page Range: 42-65
Depositing User: Rory Ridley-Duff
Date Deposited: 17 Oct 2018 15:09
Last Modified: 18 Mar 2021 06:50

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