Reviving the debate on the Corporate Purpose: A purpose-driven model of the corporation

International audienceIn the debate on corporate purpose, the shareholder value criterion has been largely discarded, as shareholders are not legally the owners of corporate assets, nor the sole “residual claimants”. The owner is the corporate entity, which can mediate between different parties and pursue objectives that differ from those of the shareholders. However, this theoretical argument is empirically weakened by the fact that the corporation is represented exclusively by members elected by the shareholders. Can corporations genuinely pursue a variety of purposes despite shareholders being the only associates or are they necessarily shareholder-oriented? In this article we study new corporate forms (such as Flexible Purpose and Benefit Corporations) to highlight the positive and neutral role that corporations can play, provided they specify their own purpose and lock it into their statutes. We develop a purpose-driven model of the corporation, which both revives the original corporate model and accounts for the management function in law. This model, we argue, profoundly reshapes the debate on corporate purpose