Hello Platform Governance; But Never Ending Corporate Governance

Abstract

Revolutionary and beneficial as it may be, the ever-increasing platform innovation effectuates regulatory issues that constitute a focal concern of the literature on platform governance. This article discusses, for the first time, the instrumental role of corporate governance in underpinning platform governance. Specifically, a stakeholder perspective provides a catalyst for the chemical combination of platform governance and corporate governance. While the stakeholder theory is not without criticism, the characteristics of online platforms lend extra support to the theory in the platform context. The article identifies several major mechanisms for channelling platform governance through corporate governance, i.e., board representation in an information capacity; independent directors; and stakeholder committees. In contrast, an economic analysis suggests that board representation in a voting capacity is not appropriate for the purpose of platform governance. As an ‘obiter dictum’, this article also challenges a position that corporate governance, which arose from traditional industrial capitalism, may impede platform innovation, which falls within the paradigm of the modern economy. It is demonstrated that corporate governance even in this traditional, shareholder-oriented formation provides an institutional framework that is conducive to entrepreneurship and innovation. Therefore, the new era of the platform economy highlights, rather than negates, the significance of corporate governance. Platform governance, online platform, corporate governance, stakeholder theory, shareholder primacy