This is an accessible overview https://theconversation.com/its-a-myth-that-companies-must-put-shareholders-first-coronavirus-is-a-chance-to-make-it-stop-129104 and links the journal article - https://scholarship.law.cornell.edu/cgi/viewcontent.cgi?article=2311&context=facpub

The notion that a corporation’s primary purpose is to look after its shareholders is widely believed and taught, but is in fact a myth with no basis in corporate law. The corporation is a separate legal entity. Because ownership of assets and liabilities are attributed to this entity, corporations are not “owned” by shareholders.

Instead, shareholders have limited legal rights, which do not include the right to directly control directors’ or managers’ behaviour. Indeed, shareholders have no special claim on a corporation’s economic returns. Their right to dividends is the same as a waiter’s right to tips: an expectation that is unlikely to be enforceable in court.

When you realise these things, it gives you a different view of company ownership and control. The idea that the authority structure does not originate with the shareholders delivers a picture in which boards balance interests between many stakeholders – with different agendas, time horizons, powers and responsibilities – all connected to the distinct legal entity that is the corporation. Importantly, this allows us to reimagine the corporation, its supporting institutions, and the processes by which stakeholders can meaningfully be represented.

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