A More Equitable Corporate Purpose

The appropriate focus of corporate purpose has long been debated by scholars, investors, and legal counsel alike, with the majority of these arguments focused on the seeming dichotomy between shareholder wealth maximization and stakeholder capitalism. These modern debates are inextricably tied to theoretical understandings of the firm, first articulated in the 1930s, which focused on the relationship between managers of firms, those firms’ shareholders, and other constituents, or stakeholders, of the firm. And while much is debated regarding the appropriate conception of corporate purpose, the initial understandings of the firm that undergird those arguments is widely accepted. Corporate governance literature has, however, largely failed to consider one important factor that would have influenced the development of theories of the firm in the 1930s—the historical context of exclusion in which those theories arose.This Chapter argues that corporate leaders and scholars engaged in debates about the appropriate role and purpose of the corporation today must also consider how women and people of color fit—or more specifically, failed to fit—into the original understandings of the corporation’s purpose. In response to the #MeToo and #BlackLivesMatter movements, corporate leaders and scholars have actively entered into a period of study and contemplation about the ways in which corporations might contribute to the creation of a more equitable and just society. That focus is admirable and necessary. But it is equally important to consider whether and how traditional notions of corporate purpose were influenced by the sexist and racist policies that permeated American society when foundational pieces of corporate scholarship were debated and developed. Once historical realities are considered, “A More Equitable Corporate Purpose” may, perhaps, reveal itself