Beyond Corporate Governance: Why a New Approach to the Study of Corporate Law is Needed to Address Global Inequality and Economic Development

For more than forty years, corporate law scholars have been focused principally on issues of “corporate governance” understood as the study of rules governing the internal allocation of power among shareholders and managers within a single firm, and its global corollary, “comparative corporate governance” exploring the impact of domestic share ownership patterns in different countries. In the development field, corporate scholars have largely focused on identifying “best practice” corporate governance rules designed to lead to the productive efficiency of individual domestic firms or to patterns of share ownership that increase the efficiency of domestic capital markets. While the questions traditionally taken up by scholars of corporate law and economic development are not unimportant ones, the author argues that engaging issues of inequality and growth under conditions of modern capitalism will require a different approach. Specifically, using global textile production and the recent spate of catastrophic incidents in textile factories in Bangladesh as a representative example, the author suggests that attention in corporate law scholarship to “systemic governance” in the relations between firms in global value chain structures and between firms and states as they adapt to these chain structures are crucial to addressing issues of corporate power, distributional equity and economic growth in the modern global economy.