Document Type
Article
Publication Title
The Journal of Corporation Law
Publication Date
2025
Abstract
Everyone has values which conflict with the sheer maximization of profit. When those conflicts occur, virtually no one will consistently choose profit over conflicting values, especially when the potential profit is small or conflicts with other economic values, promoting the common good or preserving a functioning ecosphere. This Article explores a multi-stakeholder approach that will increase the quantum of humanity in the governance of American large public companies in the era of social media and online communication. We dub this crowd-based strategy of steering public corporations “total governance.” Total governance recognizes that individuals can engage with public corporations from multiple angles, as investors, employees, online activists, community members, and consumers. While we often think in terms of monolithic roles, imputing interests to shareholders, for example, on the assumption that shareholders are only shareholders, this is never true. Every shareholder, whether human or institutional, also inhabits other roles and has other interests and values. Moreover, role-players can ally with other role-players with the same or different stakes in the firm to participate in the governance of the corporation.
The diffusion of technologies and social media, facilitating online communications on a global scale, enables coordination and stakeholder coalitions. As digitally native Millennials and GenZ’ers move into positions of influence, the system of passive and disenfranchised human stakeholders is about to change. Human stakeholders of different categories can act collectively to pursue and promote values that resonate with them as shareholders, employees, customers, members of communities, or inhabitants of a shared planet.
As human shareholders join forces with employees, consumers or others, they will overcome the two key myths of traditional taxonomy of stakeholders’ interests. First, we often assume that the interests of individuals in a corporation’s performance and practices depend solely on the type of stake that they have in a corporation. According to this myth, shareholders have a monolithic interest as shareholders, generally assumed to be maximization of the economic value of their investment. But human shareholders hold and rank numerous values that speak to their human nature: some shareholders are prosocial, some are greedy, some prioritize the environment, some care more about social justice. Second, it is a myth that stakeholders of different categories (e.g., shareholders, consumers, employees, etc.) carry different interests defined by their stakeholder role. On the contrary: many individuals occupy multiple roles with respect to particular corporations (employees, for example, often are also shareholders, consumers, neighbors and potential pensioners). Moreover, individuals have interests and commitments beyond their roles. Some employees, shareholders, and consumers prioritize social justice over anything else. Other employees, shareholders, and consumers rank first the environment, economic-driven choices, or other values.
This Article explores an innovative corporate governance paradigm that rejects fictitious assumptions about shareholders and other stakeholders, considers how online communication facilitate cooperation across stakeholders of different categories, and recognizes that the key common denominator of human stakeholders is their humanity. Human stakeholders can coordinate on a global scale to exert leverage on corporations to make them answerable to human beings. They can cooperate and coordinate across stakeholder categories to pursue common goals that depend on the values they prioritize, not on to which stakeholder role they are assigned.
Recommended Citation
Sergio Alberto Gramitto Ricci and Daniel Greenwood,
Total Governance, 50 J. CORP. L. 353
(2025)
Available at: https://scholarlycommons.law.hofstra.edu/faculty_scholarship/1656