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One of the oldest corporate law issues – for whom is the corporation managed? – has become one of the hottest public policy issues of corporate law. The traditional idea, especially in the USA, is one of profit generation for shareholders (shareholder value). The new trend holds instead that the purpose of companies is to produce solutions to problems of people and planet and in the process to produce profits. This has been accompanied by a vivid battle between the shareholder value theory and the stakeholder value theory. For financial institutions and other regulated companies, the regulators see the primary objective of corporate governance in safeguarding stakeholders’ interest in conformity with the public interest on a sustainable basis. Historically, state concessions for corporations were granted only if a public utility could be established. Yet the concession system faded away, and the targeted pursuit of general interests was assigned no longer to stock corporations under stock corporation law, but to antitrust law, securities regulation and other laws. Traditional economic theory defends the primacy of the shareholder as the most efficient operating principle, one which leads to value creation for all stakeholders of the company, whereby tax and transfer systems can be used to redistribute economic value to other stakeholders. From the side of behavioural economics and the social sciences, the main criticism is the externalisation of costs and damages as projected onto stakeholders other than the company and the shareholders. With the ESG movement, the development of an indirect pursuit of general aims seems to reverse the historical development and challenges legislators. This is exemplified by the French Duty of Vigilance Law of 2017, the French Loi Pacte of 2019, the German Value Chain Diligence Law of 2021 and the European Directive on Corporate Sustainability Due Diligence (CSDDD) forthcoming in 2024 (Trilogue compromise of 14 December 2023). These laws pose many problems as they lack clarity and thus carry uncertain practical and economics effects not only for enterprises but also for their suppliers and buyers (including SMEs) and for international and global competitiveness. For the legislators who want to promote stakeholder interests, the key problem is enforcement and enforceability. They have to choose from, or combine, various options: market discipline and self-regulation; codes with the comply and explain mechanisms; disclosure and auditing; and building an enterprise law with internal and external requirements. These requirements include: duties of the enterprise; rights, duties and organisation of the corporate organs; public enforcement by state agencies, public procurement mechanisms and the attorney general; and private enforcement by shareholders and possibly stakeholders.

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