Directors, Market Power, and the Democratic Stakeholder

The discussion on Directors’ responsibilities in a time of change essentially revolves around ESG — and around the idea that directors must consider a broader set of stakeholders and systemic risks when exercising their duties. But there is one dimension that often remains implicit: the competitive structure of the markets in which firms operate.

If ESG requires boards to look beyond short-term profits, we must also ask: what is the institutional environment that makes long-term sustainability possible? My suggestion is that competitive markets and democracies are part of that environment.

In that sense, democracy itself can be understood as a stakeholder. And competition law is one of the tools through which we protect it. Antitrust law was not originally designed simply to lower prices. It was designed to disperse power.

When the Sherman Act was adopted at the end of the nineteenth century, its sponsors did not primarily speak in the language of consumer welfare. They spoke in the language of political liberty. A society that rejects kings in politics, they argued, should not tolerate kings in markets. Concentrated economic power, like concentrated political power, places decisive authority in too few hands. And over time, that has democratic consequences.

The American trajectory: from democracy to efficiency — and back

In the United States, that original constitutional intuition gradually receded. Beginning in the 1970s, the Chicago School reframed antitrust around economic efficiency and consumer welfare. This was a major intellectual achievement. It introduced analytical rigor and economic discipline into legal reasoning.

But some assumptions were pushed too far. For example, the belief that markets tend to self-correct. That concentration naturally generates efficiencies and innovation. That market power is usually temporary. On that basis, enforcement retreated. Structural concerns about concentration were marginalized. Over time, concentration increased across many sectors of the economy.

The effects were not confined to product markets. We have also seen a rise in monopsony power — particularly in labor markets. When employers face limited competitive constraints, they can suppress wages, restrict mobility, and shape contractual terms in their favor.

At that point, the issue is no longer purely economic. Durable economic power often translates into political influence — through privileged access, agenda-setting capacity, and regulatory capture. Not all scale is problematic. But entrenched market power that shields firms from both competition and public accountability is a democratic risk.

The renewed interest in antitrust in the United States reflects a broader conceptual shift. The debate is no longer confined to one political camp. In his recent intervention Antitrust Policy for Conservatives, Mark Meador has argued — from within a traditionally conservative framework — that competition law should not be reduced to narrow price effects or short-term consumer welfare metrics.

At the same time, recent developments in U.S. enforcement illustrate how contested this terrain has become. Earlier this year, Abigail Slater, the head of the U.S. Department of Justice’s Antitrust Division, abruptly resigned amid internal tensions over the pace and direction of enforcement — a move widely viewed as reflecting political pressure and raising concerns about the independence of competition policy.

These episodes show that even high-level institutional roles in antitrust have become central battlegrounds in broader debates about the goals and governance of competition law. Importantly, this conflict does not neatly track traditional partisan lines. Pressures for both stronger and more restrained enforcement can be found within Republican and Democratic circles alike. The question of whether competition policy can be reduced to short-term price analysis alone is therefore not a left-right dispute, but a deeper disagreement about the purpose of antitrust itself.

The European trajectory: competition as constitutional architecture

Europe followed a different path, shaped by historical experience. In European countries such as Germany and Italy, concentrated economic power proved compatible with authoritarian political systems. Cartelized economies aligned more easily with centralized authority. Especially in Germany, large firms could secure protection and privilege through direct relationships with the state. Smaller firms, by contrast, depended on open and contestable markets — and on democratic institutions — to survive.

After World War II, European integration embedded competition law directly into the constitutional structure of the Union. Competition rules were placed in the Treaties, entrusted to independent institutions, and subject to judicial review.

Influenced by American antitrust, European antitrust rules were shaped by the Ordoliberal School born in Freiburg after the WWII, and which saw market power concentration as a danger for competition but also for democracy. Indeed, European competition law was conceived not merely as economic policy, but as a structural safeguard of an open society. For decades, this model insulated enforcement from political bargaining and preserved competition as a constitutional principle.

Directors’ responsibilities in this context

Returning to directors’ responsibilities in a time of change — there is a deeper lesson.

In ESG discussions, boards are often asked to reason in ways that are counterintuitive for a purely profit-maximizing enterprise: to internalize environmental externalities, to consider social impacts, to think long term rather than quarter by quarter.

The same may be true here. If democracy is a stakeholder, then directors operate within — and benefit from — a system that depends on open and competitive markets. The long-term sustainability of their own firms ultimately relies on the stability and legitimacy of that democratic framework.

This may require a form of counterintuitive reasoning: recognizing that preserving contestability, and accepting robust competition constraints may, paradoxically, protect the firm’s future by protecting the democratic and institutional environment in which it thrives.

Competition law, in this sense, is not an external constraint on corporate freedom. It is part of the institutional architecture that allows firms, markets, and democracies to endure.

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Jacques Moscianese is the group head of the Institutional Affairs Department of Intesa Sanpaolo.

This blog is based on a discussion held at the Intesa Sanpaolo Business Law and Regulation Conference: "Directors' responsibilities in a time of change" on 6th March 2026. Visit the event page to explore more conference-related blogs.

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