Melbourne Law School - Research Publications

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Reconstituting the Contemporary Corporation through Ecologically Responsive Regulation

Parker, C ; Haines, F (Thomson Reuters (Professional), 2022)

Corporate governance and regulation comprise two legal frameworks that operate together from, respectively, the inside out of the corporation and the outside in, to shape business conduct. This article critically analyses two different ways in which corporate governance and business regulation intersect. We argue that both fall short of addressing the ecological and social harms generated by business. The first intersection combines shareholder primacy with domain specific regulation. The second combines a stakeholder model of corporate governance with responsive regulation. Yet, there are signs that a third “ecologically responsive” intersection may emerge to shape business practice in light of the ecological crises we currently face. We see potential for this approach in recent proposals to reform corporate governance to encourage purposive, problem-focused corporations together with greater responsiveness and multiple business forms. To achieve this potential, though, requires a radical re-conceptualisation of regulation towards an “ecologically responsive” approach.