"Are the ends of corporate governance the interests of the shareholders or stakeholders?
I say neither.”
No one can lawfully own a corporation. A corporation cannot be bought and sold or compelled to work for another.
Corporations are distinct, separate and sovereign entities.
What makes a corporation a person ? It’s not biology. In the eyes of the law, flesh and blood are not the markers of personhood. A person is anyone or anything to whom a state grants the rights of personhood: the right to own property, the right to make promises, the right to sue and be sued and the right to be responsible for wronging another.
Nor, is sentience a barrier to personhood. The law has long recognised that those who cannot act for themselves may act through agents, such as a board of directors. Who, historically, had an unequivocal duty of loyalty to the corporation.
If corporations are not property, how can they be used considered a mere tool or technology.
While a technology is created to achieve an objective, a person cannot be brought into being for an objective. In any other context, this suggestion would be abhorrent and offensive.
Yet, despite their personhood, corporations are still treated and mistreated as technologies. According the norms of corporate governance, corporations exist to enrich other persons (both corporate and human) Misconceived as nothing more than elaborate cash machines, they are denied their most fundamental right: the right to choose and realise their own purpose through their agents.
In a free market system, the needs of the shareholder are satisfied out of the needs of the corporation. The shareholder’s share of wealth created by the corporation is commensurate to the needs of that corporation, not the needs of shareholder. More importantly, a corporation should be free to elevate the priority of any other stakeholder if that is in its interest.
Healthy companies prioritise their self-interest (defined as all the capitals - human, intellectual, financial, natural, produced and social) in a way that contributes to their strength, resilience and ultimate longevity as a sovereign legal entity.