- Start date: 1 April 2007
- End date: 1 January 2008
- Primary investigator: Professor Andrew Keay
Large public companies tend to dominate societies all around the world. They have a significant amount of power in communities, as they employ large numbers and sell huge quantities of products.
Notwithstanding this, there has been uncertainty for many years as to what should be the actual ultimate objective of these companies. This uncertainty has led in the past 20 years to a substantial and intense debate, concerning the objective.
This research seeks to engage in a critical analysis of the shareholder primacy (value) and stakeholder theories, and then will proceed to explore what are, arguably, attempts by the United States, with constituency statutes, and the UK, with enlightened shareholder value (in s.172 of the Companies Act 2006), to modify the former approach and include aspects of the latter.
The research seeks to develop a new model for dealing with the corporate objective. This is titled the Entity Maximisation and Sustainability (EMS), model.
The basic argument behind this model is that the objective of companies is to engage in entity maximisation and sustainability and this involves inter alia, enhancing the company's wealth, but unlike with profit maximisation, this is not always measured by how much profit has been made.
I am writing up the research as a monograph to be published by Edward Elgar.
Keay, A. (2008) "Ascertaining the Corporate Objective: An Entity Maximisation and Sustainability Model", Modern Law Review, 71, pp.663-698.