Shareholders or Stakeholders For whom do directors govern the corporation?
A common feature of company law in most countries is that directors have a legally defined duty to promote the success of the company.
But what does the success of a company actually mean? Is it just the generation of profit for shareholders? Or can a company have some other purpose?
The answer to that question depends on your conception of what a company is, and what it exists to do.
There are various definitions of a company, most of which emphasise its role as a vehicle for team (rather than individual) commercial activity. Legal definitions stress that a company has an identity that is distinct from any of the individuals involved with it.
A possible starting point for conceptualising the success of a company is to consider what success means for human beings.
Dr. Roger Barker, IoD Director of Policy and Governance, explored this topic in a speech delivered at the NEXT Corporate Governance Conference, Seoul National University on 22 September 2023.
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