The Perpetuity of the Corporate Entity: Implications for Shareholders and Stakeholders
Corporate Ownership & Control, Forthcoming
19 Pages Posted: 9 Sep 2008
Date Written: 2008
Abstract
This paper emphasizes the principle of perpetuity of the corporate entity, to construct a relationship between current and future shareholders of a corporation. By temporally extrapolating the principles of agency theory to cover future shareholders of the corporation, this paper seeks to extend the debate on corporate governance in new directions. The broad postulates of such temporal extension may help reconcile the extant debate between shareholder value maximization and stakeholder perspectives: Constructing a relationship between current shareholders of the corporation, and an undetermined, but discrete, body of future shareholders, provides the basis for a wider interpretation of the shareholder-stakeholder delineation; such that stakeholders can be construed as potential future shareholders of the corporation. In such a manner, this paper advances both theory and method in approaching the shareholder-stakeholder debate.
Keywords: Corporate Governance, shareholders, stakeholders, agency theory, stakeholder theory, corporate entity, legal fiction
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