Medieval corporations, membership and the common good: rethinking the critique of shareholder primacy

Samuel F. Mansell, Alejo Jose G. Sison

Research output: Contribution to journalArticlepeer-review

11 Citations (Scopus)
3 Downloads (Pure)

Abstract

The notion that business corporations should be managed for the exclusive benefit of shareholders has been widely challenged. In particular, critics have argued that directors are authorised to serve the interests of the corporation: a legal entity that is completely separate from its shareholders. However, the premise that shareholders have sole legitimate claim to ‘membership’ has rarely been questioned. This article explores medieval thought on ownership, authority and participation in guilds, churches, towns and universities, and shows that membership can be understood as participation in, and shared responsibility for, a group’s distinct collaborative activity over time. Our theory suggests that ‘membership’ in the modern corporation extends to non-shareholding stakeholders, but with the implication that ownership and authority are vested in the members as a body and not in a separate entity.
Original languageEnglish
Pages (from-to)579-595
Number of pages38
JournalJournal of Institutional Economics
Volume16
Issue number5
Early online date9 Jul 2019
DOIs
Publication statusPublished - Oct 2020

Keywords

  • History of legal and political thought
  • Business ethics
  • Corporate governance reform
  • Institutional theories of the firm

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