The Stakeholder Principle, Corporate Governance and Theory - Evidence from the Field and the Path Onward

This article provides an overview of the development of the stakeholder idea in corporate governance, and presents the results from a survey of the American, British and Canadian corporations included in the Fortune 500 Global Corporations (2009) for their adoption of the stakeholder principle. The survey finds near-unanimous acceptance of the stakeholder vision. 97 percent of the US, UK, and Canadian companies included in the survey acknowledge the stakeholder principle in some form. The trend of adoption of the stakeholder model is unmistakable, and this has significant implications for corporate theory. The article also examines how the emerging ideas about stakeholders and the recognition of their interests in law can fit into corporate theory. For doing so, it applies the tools of a nascent school of legal theory - namely, new legal realism. The article argues for a clear articulation of the conceptual underpinning of business corporations and resolving some inconsistencies in the current framework.