Stewardship and membership: Governing corporations with strangers
Authors: Nordberg, D.
Conference: European Academy of Management
Dates: 14-17 June 2022Abstract:
The problems of corporate governance, and particularly the relationships between investors and companies, seem intractable, despite decades of theorising and empirical research. This thought experiment asks us to look at the problem through a fresh lens. It draws on the quaint British legal custom of calling shareholders “members”, and then uses the political philosopher Michael Walzer’s idea of membership in states, clubs, neighbourhoods, and families to draw lessons for the corporate world. Rethinking what membership of a company might mean points to a pragmatic escape from short-termism without the injustice of depriving shareholders of rights. This path also points to having a corporate governance system that relies too heavily on mechanisms only modestly well, while reducing the reliance on expecting investors and directors to act always ethically.