Incorporating Purpose
The New Legal Foundations for the Corporation and its Management

The Element offers insights into the thinking that inspired changes in French company law in committing to a raison d'être.

Blanche Segrestin (Author), Kevin Levillain (Author), Armand Hatchuel (Author)

9781009623490, Cambridge University Press

Hardback, published 6 March 2025

76 pages
22.9 x 15.2 x 0.6 cm, 0.249 kg

In this Element, emerging legal forms of purpose-driven corporations are analyzed, revealing two important insights. First, within the traditional corporate law, a purpose is neither protected nor enforceable over time. While companies can have goals beyond profit, these are controlled by shareholders, who also appoint corporate managers. To protect social or environmental ambitions, especially during shareholder changes, a legal commitment from the company is essential. Second, these new legal forms highlight the need to redefine the corporation's legal foundations. In an era when management decisions impact entire populations and the planet, the law inadequately conceptualizes the conditions necessary for responsible management. The Element argues that embedding a purpose in the constitution of corporations can provide these new legal foundations. Ultimately, the Element suggests that purpose provides a unified theoretical framework for understanding the variety of corporate legal forms and for discussing their respective potentials and limitations in holding corporations accountable in the face of upcoming transitions.

1. Corporate purpose: can we rely on corporate leaders?
2. Why corporate purpose needs law: the missing legal grounds of corporate purpose
3. Revisiting the legal foundations of the business corporation
4. Purpose-driven corporations: a renewed landscape of alternative governance structures
5. Conclusion: the corporation and the collective interest
References.

Subject Areas: Corporate governance [KJR]