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Medieval corporations, membership and the common good: rethinking the critique of shareholder primacy

Published online by Cambridge University Press:  09 July 2019

Samuel F. Mansell  and
Alejo José G. Sison
Samuel F. Mansell*
Affiliation:
School of Management, University of St Andrews, St Andrews, UK
Alejo José G. Sison
Affiliation:
School of Economics and Business, Universidad de Navarra, Pamplona, Spain
*
*Corresponding author. Email: sfm5@st-andrews.ac.uk
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Abstract

The notion that business corporations should be managed for the exclusive benefit of shareholders has been widely challenged. In particular, critics have argued that directors are authorised to serve the interests of the corporation: a legal entity that is completely separate from its shareholders. However, the premise that shareholders have sole legitimate claim to ‘membership’ has rarely been questioned. This article explores medieval thought on ownership, authority and participation in guilds, churches, towns and universities, and shows that membership can be understood as participation in, and shared responsibility for, a group's distinct collaborative activity over time. Our theory suggests that ‘membership’ in the modern corporation extends to non-shareholding stakeholders, but with the implication that ownership and authority are vested in the members as a body and not in a separate entity.

Keywords

History of legal and political thoughtbusiness ethicscorporate governance reforminstitutional theories of the firm
Type
Symposium on Corporations
Information
Journal of Institutional Economics , Volume 16 , Issue 5 , October 2020 , pp. 579 - 595
Copyright
Copyright © Millennium Economics Ltd 2019

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