Today’s lively debate around the ‘purpose’ of the business corporation and the pressure on management and investors to protect the environment, enhance diversity and address growing socio-economic, gender and racial inequality has its roots in a century-long dispute between competing views on how to regulate economic affairs. Central to these contentions remains the dispute over a narrow interpretation of the corporation as investment vehicle owned and operated in the interest of shareholder-investors and the view that its significant place in society translates into a wider range of responsibilities to different stakeholders. With its typical focus on specific aspects of corporate law such as, for example, the election and duties of directors or a board’s rights to reject shareholder proposals, the place of the corporation and its regulation in a changing socio-economic, political and cultural context mostly remains underexplored. And yet, the debate, historically framed around ‘corporate social responsibilities’ and today’s focus on ‘ESG’ and corporate purpose, cannot fully be understood from within – that is, as a concern of corporate law or of securities regulation alone. The contentions that drive the debate over time illustrate nothing less than the key position that the corporation and its regulation continue to assume in a continuously evolving political economy since the economic liberalism of the eighteenth century through interlocking phases of industrialization and globalization up to the financialization of the economy in the latter half of the twentieth century and the explosive digitalization of the early twenty-first century. ‘Corporate law’, beyond its doctrinal demarcation, then, through a typology of different business associations – from sole proprietorship to stock corporation – is but a short-hand for a constantly evolving set of regulatory arrangements which cut across not only different legal fields but also implicate a new and complex sociology of new norm-creating actors and processes. These arrangements have today come under heightened scrutiny not only in the light of recurring financial collapses but as the long-term destructive impact of the business corporation on the habitat of humans, animals and the environment has moved into the broader public debate. The continuing tensions between shareholder value maximization and stakeholderism views on the corporation point to a deeper conflict around the sustainable organization of the economy which prompts a form of theoretical and political engagement that challenges the legal field boundaries between corporate, labor or tort law by asking the question what role law – altogether – can play in addressing this crisis
