The Corporation As Imperfect Society (Part 1)(Part 2)
Brian M. McCall
The way we think determines the way we will act. The way we conceive of a corporation will have profound implications for how judges, legislators, directors and employees will act with respect to a corporation. Current corporation theory is dominated by private law conceptions of the corporation. Such a conception places, in the realm of private ordering, not only corporate law, but corporate decision making. Yet, corporations, especially publicly traded ones, are public entities. Onto logically they are more similar to governments than private contractual relations. This Article argues that rather than contractor property law, public constitutional law is a more appropriate hermeneutic for understanding the corporation. Consequently the Article applies Aristotelian political philosophy to the corporate enterprise. The Article argues that the corporation is one of the many imperfect societies thatform the perfect society of the nation. The implications of such understanding involve a recognition that the corporation must be governed consistently with the common good of the corporation but with due attention paid to the common good of the perfect society of which the corporation is apart.
The Article turns from theory to practice and briefly examines some of the main aspects of modern corporate law. The analysis reveals that the principles of Aristotelian political philosophy are evident in the results of corporate law decisions. This is not surprising since the corporate form developed in the shadow of such philosophy which formed the basis of Western political philosophy generally.