Leon Yehuda Anidjar (Hebrew University of Jerusalem – Faculty of Law; Hebrew University of Jerusalem – Federmann School of Government and Public Policy) has posted Reinventing Companies’ Purpose Around the World on SSRN. Here is the abstract:
This Essay provides a comprehensive account of the theoretical background underlying different ownership patterns of public companies around the world. The theoretical setting offers several novel normative arguments concerning the global debate over the purpose companies should promote and the potential of global convergence of corporate governance rules. First, each ownership structure has its relative benefits and costs which may not provide a clear preference between them. Thus, policymakers should refrain from struggling for selecting a specific corporate ownership structure which maximizes utility for society and instead should focus on designing precise legal mechanisms that prevent controlling shareholders and insiders from pursuing their private interests at the expense of the company's benefit. Second, the current controversy on global unification remains fruitless because scholars haven't considered the possibility that each company has its unique mission which jurists should determine according to its special features and the political, institutional and financial qualities of the relevant market. Therefore, rather than striving to understand the sole goal which companies generally have to materialize, we should recognize the diverse reality of corporations and markets that justify constructing a pluralist perception of corporate law and governance. Such understanding may result in forming a personalized law which will regulate more accurately the power relations between shareholders and insiders in different markets around the world.