Stakeholders

This chapter highlights how the law gives shareholders more influence than creditors, employees, or other constituencies, but also how the interests of these stakeholders are integrated into company law. Three normative conclusions flow from the theoretical perspective advanced in this book. The first is that we should give up on the idea that financial incentives can serve interests other than those of the directors. Second, programmatic statements encouraging companies to have a purpose or encouraging directors to consider stakeholder interests in the same way as shareholder interests are unlikely to have much effect. Third, if there is a desire to further integrate non-shareholder interests into company law, this is, from the perspective of this book, best achieved through an integration of their interests into the decision-making process of the company. An example of such an intervention can be found in the UK Corporate Governance Code which recommends the integration of work-force related concerns through a director appointed from the workforce, a formal workforce advisory panel, or a designated non-executive director.