Abstract

The literature on management identifies three models for the relationships between a company’s management, its board, its shareholders and other stakeholders, as well as the corporation’s goals: the shareholder model of corporate governance, the employee governance model and the stakeholder model. One can identify in current business practice a further model of corporate governance, which may be entitled “the controlling shareholder model”. The goal of this paper is to show that these models are grounded in long-standing philosophical ideas. The philosophical basis of the shareholder model is to be traced to John Locke’s theory of private property; Karl Marx’s approach underlies the employee governance model; the stakeholder model reflects the Aristotelian theory of the golden mean; and the controlling shareholder model expresses Thomas Hobbes’s conception of the sovereign power. We wish to argue that recognizing these philosophical ideas at the basis of the models of corporate governance would facilitate the analysis of the difficulties inherent to these models. We also maintain that this recognition is instrumental in forming a normative position concerning the meaning of corporate governance to present-day society.