The Debate Surrounding the Company Purpose in the Post-Pandemic Age

Authors

Leon Anidjar, IE Law School, Madrid

Abstract

The recent COVID-19 pandemic crisis produced many creative responses to confront its adverse results. Many companies worldwide were required to adopt innovative thinking by altering their business activities and revising their entire supply chain by attracting different types of resources delivered by various stakeholders. This Article explores the implications of this fundamental change on central theoretical assumptions of corporate governance. It articulates a new stakeholders-resources theory that explores governance norms as part of the firm's quest for inputs required to generate a competitive advantage. It applies this analytical framework in the debate on corporate purpose. This Article argues that companies have to consider the interests of diverse constituencies, as long as it affects the company's ability to produce value as an independent and separate legal entity. Moreover, it advocates a novel contingent interpretation for formulating a purpose that acknowledges the dynamic nature of business needs and incorporates the life cycle and the industry patterns to form an instructive tradeoff between efficiency, fairness, moral, and public policy considerations of understanding a company's purpose. Consequently, this Article's reformulation of the debate brings closer companies'" business challenges and the law and regulation governing companies' multi-level interactions with various constituencies to address unique encounters effectively.

Disciplines

Comparative and Foreign Law | Estates and Trusts | International Law | Internet Law | Law | Securities Law

Recommended Citation

Leon Anidjar, The Debate Surrounding the Company Purpose in the Post-Pandemic Age, 6 Cardozo Int’l & Compar. L. Rev. 1 (2022).
Available at: https://larc.cardozo.yu.edu/ciclr/vol6/iss1/3