Corporate Purpose and Board of Directors: Means and Ends of Corporate Governance
(Enlightened) shareholder value is a widespread opinion among legal scholars and lawmakers in Switzerland. In other countries, we observe today a clear shift in favor of stakeholder governance.
In this article, we advocate that shareholders are one among several constituencies that make possible the achievement of corporate purpose. Hence, corporate law and practice should promote corporate purposes rather than profit potentials for investors.
In our view, the board of directors shall act as both the guardian of the corporate purpose and the mediator of the various (potentially) conflicting interests held by the different stakeholders, including shareholders. In this context, the board shall conduct a sustainable business to create value for the company over the long-term. To that end, it has to take into consideration all stakeholders (shareholders, employees, customers, suppliers, creditors and communities) and form a partnership with shareholders to obtain a commitment from…
