Going Political? Towards Deliberative Corporate Governance

Abstract

Current challenges in corporate governance increasingly require a deeper appreciation for the political nature of corporation, and most likely a reflection on the assumptions behind dominant governance practices. This article suggests that the emerging theoretical models in economics and finance, which clearly recognize the role of all stakeholders, are limited by their narrow conception of politics as voting. Building on an historical survey of corporate governance models, and on the literature on deliberative democracy and political corporate social responsibility, I suggest that a deliberative corporate governance approach would help design better governance practices. I illustrate this idea with a case of shareholder engagement and conclude with the implications for other governance practices.

Keywords: Corporate Governance,Theory of the Firm, Deliberative Democracy, Deliberative Governance, Shareholder Engagement, Corporate Social Responsibility

JEL Classification: M14, G32, G34