Trust and public companies: beginning to reconceptualise corporate law in a networked world

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2013

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Tomasic, R.
Akinbami, F.

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Journal article

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Australian Journal of Corporate Law, 2013; 27(3):233-261

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Abstract

The rise of the information age has led to what some have referred to as the network society. The rise to prominence of the network society is likely to change the nature of corporate organisation and activity. It is also likely to have huge implications for how we think of corporations- ideas that the corporation is a ‘nexus of contracts’ or a means of reducing ‘transaction costs’ will no longer accurately describe the true nature of the modern ‘network enterprise’ which the corporation has become. Arguably, the idea of trust can be more closely associated with this new form of network enterprise. It is also likely that many of the previously dominant ideas in corporate governance, such as agency theory and shareholder primacy, will no longer be adequate for articulating how best to govern the modern network enterprise. This is largely because they conflict with a wider trust-oriented approach. Such an approach facilitates greater stakeholder engagement in corporate governance. This article suggests that, going forward, trust and embedded stakeholder ideas will play a greater role in the organisation and governance of corporations.

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Copyright 2013 LexisNexis

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