Corporate Purpose, Social Enterprise Law and the Future of the Corporation: A UK Perspective

Abstract 762 This article examines the British Academy’s Future of the Corporation research programme (“Programme”), focusing on its “legal” pathway and “law” principle, in the context of a thought experiment involving the UK. The law principle is that company law should require companies to state a corporate purpose in the articles of association. The Programme advocates for an “institutionally” focused corporate purpose. However, attendant examples the Programme furnishes to illustrate how the law principle could be operationalised by national policymakers showcase other manifestations of corporate purpose, specifically the “pluralistic stakeholderism” and the “mission statement” approaches. These alternative approaches are presented by the Programme as if they are consistent with an institutional corporate focus when they are not. UK policymakers must distinguish between these three different conceptions to avoid mandating corporate purposes misaligned with the Programme’s definition. These alternative approaches are problematic not only because they diverge from the Programme’s institutional articulation, but also because they introduce serious directorial accountability deficiencies. If adopted by companies, these deficiencies could lead to increased agency costs and resource waste, undermining the Programme’s core concern with corporate accountability. This article argues that policymakers should draw from social enterprise law, particularly the UK “community interest company” regulatory regime, to develop a government oversight registration mechanism. Such a registration mechanism would screen provisional corporate purpose statements, ensuring they align with the Programme’s specifications.