WHAT IS A CORPORATION?

Corporation: a “specific legal form of organization of persons and material resources, chartered by the state, for the purpose of conducting business”

 

Corporate law

- Creates a governing body to manage the corporation–usually a board of directors

Chief Executive Officer (CEO) is hired by the board of directors to manage the corporation in its day-to-day affairs

- Dictates the duties of those directors - to operate in the interests of shareholders who own the corporation

The interests of the shareholders is understood to be making money for them, i.e., producing dividends and/or increasing the value of their shares

The shareholders can sue the board if the corporation fails to adequately pursue their interests

- Casts ethical and social concerns as irrelevant, or as stumbling blocks to the corporation’s fundamental mandate

- Leads corporations to actively disregard harm to all interests other than those of shareholders

 

U.S. corporations are legal “persons”

- They can sue and be sued

- They are afforded rights, e.g., due process, 1^st amendment, etc.

- Historically, this is a relatively recent development

        The fluidity of law