THE BUSINESS FIRM AS A POLITICAL “SUBJECT”—ALL RIGHT, BUT WHICH KIND?

Abstract

Business firms are a “subject” of political concern, but both mainstream economics (shareholder value) and mainstream management (stakeholder theory) refuse to recognize them as a political “subject” (agent). Their common mistake is to fail to grasp the gap between the legal person (the corporation) and the economic organization (the firm itself). Yet, two powerful factors are nowadays shifting opinions toward the political “subject” position, insofar as they are gradually closing the gap: one (codetermination) through board-level employee representatives, the other (CSR) by broadening CEOs' objectives beyond shareholder interests alone. The recent corporate law in France, despite insightful innovations, fails to acknowledge the fact that enlarging the missions of the firm requires a new balance between labor and capital within corporate governance.