Introduction to Part III

Summary

In Part I, we argued that stakeholder acceptance of corporate governance needs to be understood as a part of the broader ideology of modern democratic society built upon the guarantee of individual liberty. This ideological context defines what is politically acceptable in society, both in general, and in the particular case of the corporation. In Part II, we showed that corporate governance has evolved over the last two hundred years to reflect both a changing definition of the entrepreneurial function and an increasing fragmentation of society. Although the dialectic opposition of power between entrepreneurial concentration and social fragmentation is integrated in corporate governance models to this day, corporate governance procedures, like governance procedures more generally, have democratized over time.

Our conclusions from Part I and Part II notwithstanding, it would be wrong to stop at this point and conclude that corporate governance is nothing more than a special case of political governance in modern society. The corporation is a political space, but it is also, and above all, an economic space. The political and indeed the broader social legitimacy of the corporation are substantially tied to its ability to create wealth for society. After all, the corporation's objectives are not to assure the peace (like the state) or to nourish spiritual well-being (like a church). As a form of organization, the corporation will only be accepted by society for as long as it produces wealth for the collective.