The Modern Corporation Statement on Politics

Abstract

Corporate governance is political. Corporate governance is about who gets to have a say in how businesses are organized and how their fruits are divided among different constituencies, particularly owners and workers. National and international politics, laws and regulations shape both the issue of decision-making and the issue of division.

In this framing, questions about the “purpose of the corporation” are distinctly political, because the organization of corporate governance is a consequence of political decisions; a stake of political struggles, creating some of the basic ground rules over how the proceeds from business are distributed; and a source of political interests and conflicts because actors’ position in the system of business and finance shape who benefits and who has a voice in economic choices.

We provide this Summary of certain fundamentals of politics in an effort to help prevent analytical errors which can have severe and damaging effects on corporations.

Keywords: Corporate, Governance, Company, Law, Management, Shareholder, Value, Stakeholder, Economics, Politics, Sustainable, Growth

JEL Classification: A1, E6, E60, G3, G30, H1, H10, H3, H30