The paradox of the traditional justifications for exclusive shareholder governance protection: expanding the pluralist approach

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Abstract

The modern conceptualization of the company states that shareholders, as sole owners and residual risk-bearers, are entitled to assume that the company will be run in their interests exclusively. In a recent article, Gavin Kelly and John Parkinson contended that the shareholders are not the only group to bear the residual risk of a company's activities and that other groups, most notably the employees, are entitled to governance protection. Accordingly, company law should adopt a 'pluralist approach' and widen the parameters of corporate legal protection. This paper contends that the traditional reasons advocated for exclusive shareholder corporate governance protection are paradoxical in that they can be utitlized to include non-shareholder constituents, in this case, the environment.
Original languageEnglish
Pages (from-to)9-15
Number of pages7
JournalThe Company Lawyer
Volume22
Issue number1
Publication statusPublished - 2001

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