Book contents
- Board-Shareholder Dialogue
- International Corporate Law and Financial Market Regulation
- Board-Shareholder Dialogue
- Copyright page
- Contents
- Contributors
- Foreword
- The Dialogue between Corporations and Institutional Investors
- 1 The New Corporate Governance
- 2 Shareholder Voice and Corporate Purpose
- 3 The Purpose of Corporate Purpose Statements
- 4 Systemic Stewardship with Tradeoffs
- 5 Giant Asset Managers, the Big Three, and Index Investing
- 6 Something Old, Something New
- 7 The Perils and Promise of Shareholders as Stakeholder Advocates
- 8 How to Facilitate ESG Investor Engagement
- 9 Emerging ESG-Driven Models of Shareholder Collaborative Engagement
- 10 ESG and Board-Shareholder Engagement in M&A
- 11 How Does Board-Shareholder Engagement Really Work?
- 12 Shareholder Engagement inside and outside the Shareholder Meeting
- 13 The Viability of Blockchain in Corporate Governance
- 14 Shareholder Engagement in East Asia
- 15 Board-Shareholder Engagement and Directors’ Appointments
- 16 Shareholder Proposals and the Debate over Sustainability Disclosure
- 17 Board-Shareholder Engagement and Disclosure Obligations under Corporate Governance Codes
- 18 Board-Shareholder Engagement and Insider Regulation
- 19 Market Soundings Rules
3 - The Purpose of Corporate Purpose Statements
A Response to “Shareholder Voice and Corporate Purpose: The Purposelessness of Mandatory Corporate Purpose Statements” by Paul A. Davies
Published online by Cambridge University Press: aN Invalid Date NaN
- Board-Shareholder Dialogue
- International Corporate Law and Financial Market Regulation
- Board-Shareholder Dialogue
- Copyright page
- Contents
- Contributors
- Foreword
- The Dialogue between Corporations and Institutional Investors
- 1 The New Corporate Governance
- 2 Shareholder Voice and Corporate Purpose
- 3 The Purpose of Corporate Purpose Statements
- 4 Systemic Stewardship with Tradeoffs
- 5 Giant Asset Managers, the Big Three, and Index Investing
- 6 Something Old, Something New
- 7 The Perils and Promise of Shareholders as Stakeholder Advocates
- 8 How to Facilitate ESG Investor Engagement
- 9 Emerging ESG-Driven Models of Shareholder Collaborative Engagement
- 10 ESG and Board-Shareholder Engagement in M&A
- 11 How Does Board-Shareholder Engagement Really Work?
- 12 Shareholder Engagement inside and outside the Shareholder Meeting
- 13 The Viability of Blockchain in Corporate Governance
- 14 Shareholder Engagement in East Asia
- 15 Board-Shareholder Engagement and Directors’ Appointments
- 16 Shareholder Proposals and the Debate over Sustainability Disclosure
- 17 Board-Shareholder Engagement and Disclosure Obligations under Corporate Governance Codes
- 18 Board-Shareholder Engagement and Insider Regulation
- 19 Market Soundings Rules
Summary
In critiquing Prosperity, Paul Davies raises five objections. These are: (a) inclusion of social objectives in mandatory business purpose statements; (b) the assertion that the envisaged adoption of purpose statements is “embarrassingly simple”; (c) use of the law to shield directors from adverse reactions from their shareholders; (d) the entity and managerial conception of the company; and (e) regulatory or court approval of corporate purposes. These objections are contrary to what Prosperity is advocating – a strengthening not weakening of board accountability to shareholders; a proprietary not entity view in which firm objectives are aligned with, not divergent from, those of shareholders; and freedom of choice and plurality of purposes unconstrained by regulatory, court or government intervention. Davies erroneously believes that Prosperity seeks to promote communal or social objectives. On the contrary, purpose statements assist companies with making their commitments credible. They are enabling not prescriptive or restrictive. They apply equally to private as well as communal or social objectives and they are potentially as significant in enhancing value for shareholders as other parties. Davies himself sets out how companies can make their purpose statements legally binding in an “embarrassingly simple” way without requiring any change to company law.
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- Information
- Board-Shareholder DialoguePolicy Debate, Legal Constraints and Best Practices, pp. 91 - 106Publisher: Cambridge University PressPrint publication year: 2024