The Purposive Transformation of Corporate Law

David Kershaw, Edmund Schuster

Pages 478–538, https://doi.org/10.1093/ajcl/avac004

What is the purpose of a corporation? This fundamental question is as old as corporate law itself, and traditionally it is asked with reference to the ultimate beneficiaries of a corporation’s activities. Modern management theory and the current technology-driven transformation of the economy, however, have breathed new life into the question about corporate purpose. Here, purpose is understood as an animated mission-purpose articulation of the reason for a corporation’s existence; an aspirational idea about its existence that has the capacity to bond internal and external stakeholders to the company, inspiring innovation, productivity, and customer loyalty. This understanding of corporate purpose offers a pathway to a more inclusive and interconnected form of modern capitalism.