The Purpose of Corporations in the Context of ESG Concerns: Continuing Shareholder Primacy or Countenancing Radical Reform?

In the modern age, corporations have been the cornerstone of economic systems. As stakeholders are considered as all those who benefits if the company gains and losses if the company fails, corporations cannot and should not ignore or treat them as the second-class citizens. This quest in the literature has been linked to the question of corporate purpose – in other words, whom the corporation should give priority to in their business activities, shareholders, or the broader spectrum of stakeholders. While this research shows that most of the economic, legal and policy literature, with some of the most prominent philosophers at their heart, has been hostile towards stakeholder governance and prioritised shareholdersim in all circumstances, it delves into the realm of different possibilities for a new quest to see whether stakeholderism can in reality be effectual, and highlight how current literature miss the point in truly apprehending the need to serve stakeholders’ interests. In addition, this research explores the evolving concept of corporate purpose, focusing on prioritising all stakeholders over shareholders. The research reveals that corporate purpose must extend beyond procedural obligations to encompass ethical and environmental considerations, particularly within the context of ESG concerns.