Corporate law and the history of corporate social responsibility

Chapter 21 looks at the development of US corporation law in relation to larger demands for corporate social responsibility, and finds a paradox: since the late nineteenth century, even as the large corporation was increasingly recognized as having a distinct existence as a legal person, and came to wield increasing influence on a range of stakeholders, from employees to communities to the environment, corporation law narrowed its concern to the relationship between management and shareholders. Paralleling these developments, corporate theory by the late twentieth century largely disregarded the existence of a distinct corporate personality and emphasized instead a view of the corporation as simply an aggregate (‘nexus’) of freely associated individuals. Following these developments, corporate social responsibility has been left to bodies of law outside corporate law, or to evolving sets of norms and practices outside the law altogether.