1 - The invisible crown: political foundations of the legitimate entrepreneur

Summary

The question ‘What gives the right to direct a corporation?’ cannot be answered without careful consideration of its corollary, ‘Who has the right to direct a corporation?’ In other words, who has the right to commit the corporation to a strategy, to choose its growth path and thereby have a decisive hand in determining both the corporation's future and that of its stakeholders? The question of who has the right to direct a corporation has a widely accepted general answer: direction is legitimately vested in the founder of the corporation and his/her descendants, or in the management designated by the founders. Intuitively, we draw a connecting line between those who exercise legitimate authority and the person or persons who have started the corporation. The founders and their descendants, but also the people who recreate the corporation by contributing to its development or the people who save the corporation from bankruptcy, are all considered to have an original or genetic tie with the corporation, and their legitimacy to direct derives from this bond.

Where does our shared belief in the legitimacy of the founding entrepreneur come from? Why is this belief so strong that the entrepreneur is often considered to be a general model of good governance, not only for business, but for all modern institutions, including even, sometimes, the nation state?