The Corporation and its Board is no one's b$tch. Neither is subordinate to the interests of any shareholder or other Trading Partner. The Corporation is free.
The Corporation is a separate legal person. It is not owned. It exists as an entity in its own right with its own primal objective.
The Corporation is self owned in the same manner expressed by Cohen in respect of individual sovereignty or autonomy:
"Each person enjoys, over himself and his powers, full and exclusive rights of control and use, and therefore owes no service or product to anyone else that he has not contracted to supply."
Commercial Capitalism, the original system of capitalism whereby Corporations are Traded into existence based on the benefits (Value) exchanged between the Corporation and its Trading Partners, is founded on Corporate Sovereignty and the right of the Corporation to ensure its own survival and growth within the law.
Whether for profit or not, the primal objective and purpose of all Corporations is survival and growth expressed in three ways:
- Strength
The corporations strength is measured by its inherent value (not its share value) derived through its business model.
- Resilience
The corporations resilience is measured by its ability to make and keep the best possible promises with each of its Trading Partners.
- Endurance
The corporations endurance is measured its long term survival (not its short term return to Trading Partners). Strength and resilience leads to endurance.
Corporate Sovereignty and the objective of strength endurance and resilience (SRE) are the foundations of Directorship.
SRE provides a framework to prioritize Trading Partners based on the return to the Corporation. It answers the question of how corporate directors make the best decisions.
But, that doesn't equate to "director primacy" and unfettered control. Directors, like all other Trading Partners are held accountable to their promises to the corporation and the state. Nor, does it mean that any Trading Partner will be abandoned. It just means that the Corporation will trades its way into SRE by exchanging the best possible promises with its directors, shareholders and every other Trading Partner.
For example, should a public corporation provide profit forecasts to analysts? Using SRE the Board would first consider these questions:
- What benefit does the Corporation receive from the "promise" of a forecast? Is a forecast a gratuitous promise?
- Can the promise be kept and at what cost to the corporation? Are short term decisions made to keep a gratuitous promise?
- What is the effect of the promise on the long term survival of the corporation? If the forecast was not promised would the survival of the corporation be prejudiced?
But before any of these questions can be answered, the Board must choose what it believes in. This is the most important decision a board must make.
Does it believe in Corporate Sovereignty or that the purpose of the corporation is to serve one or all Stakeholders. The boardroom pivots on that single belief.