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Who are the owners of the firm: shareholders, employees or no one?

Published online by Cambridge University Press:  09 September 2013

VIRGILE CHASSAGNON  and
XAVIER HOLLANDTS
VIRGILE CHASSAGNON*
Affiliation:
ESDES School of Management, Catholic University of Lyon, Lyon, France; GREDEG, Nice, France; and IFGE, Lyon, France
XAVIER HOLLANDTS*
Affiliation:
France Business School, Paris, France; CRCGM, Clermont-Ferrand, France; and IFGE, Lyon, France
*
*Email: vchassagnon@univ-catholyon.fr
**Email: xavier.hollandts@france-bs.com
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Abstract:

The issue of firm ownership is an ongoing debate. For several decades, contractarian theory has undoubtedly shaped the academic debate in both law and economics. Proponents of this approach suggest that shareholders can legitimately be considered the owners of a firm because they hold shares. This approach, though attractive, is legally incorrect. Legal scholars have noted that a corporation cannot legally belong to shareholders or other stakeholders; no one owns the firm (and a corporation). The question of firm ownership masks the following crucial issue: Who should govern the firm? In this article, after returning to the theoretical debate on firm ownership and explaining why a firm cannot be owned, we shall analyze power as the core of firm governance. This approach is a potentially relevant and accurate way to address the problems of specific human investment, collective creation and productive (consummate) cooperation in modern firms.

Type
Research Article
Information
Journal of Institutional Economics , Volume 10 , Issue 1 , March 2014 , pp. 47 - 69
Copyright
Copyright © Millennium Economics Ltd 2013 

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