Ideals of the Corporation and the Nexus of Contracts

Abstract

What is 'the fundamental nature of the laws' that govern ‘public corporations in the United States and the United Kingdom’? This review article explores the 'nexus of contracts' view of the corporation, against its critique by Marc Moore in Corporate Governance in the Shadow of the State (2013). While the nexus of contracts theorists are usually thought to align the corporation to the private sphere, and seek to limit government interference, Moore suggests that corporations ought to be regarded as public. His analysis seeks to demonstrate that corporate laws of the United States and United Kingdom are essentially public. This article adds a further level, that the majority view of the corporation has been that it is a social institution. This stands in stark contrast to the nexus of contracts approach, whose roots lie in comparative German-American scholarship from the 1930s. In substance, this approach illegitimately privileges the claims to govern for a 'leadership' body of directors, asset managers, or banks, all of whom gain voice with 'other people's money'. A book review article of Marc T. Moore, Corporate Governance in the Shadow of the State, Oxford: Hart Publishing, 2013, 336 pp. £59.99