Neoliberal shareholder value and the re-privatization of corporations: The disengagement of “transformative” corporate social responsibility?

Abstract

Purpose

This paper aims to investigate the extent to which the ideology of shareholder value is compatible with that of transformative corporate social responsibility (CSR). It traces the transformation of corporations from quasi-public institutions at inception to purely private enterprises beginning from the middle of the nineteenth century and attempts to locate the ideology of CSR within the wider viewpoint of shareholder value.

Design/methodology/approach

This paper adopts a doctrinal approach through a critical evaluation of the nature and implications of the shareholder value ideology. Using existing literature in the area, it traces the evolution of the shareholder value ideology and how it is antithetical to any meaningful CSR regime.

Findings

The paper finds that there is a fundamental tension between ideas about the desirability of effective CSR and the belief that it is to the benefit of society as a whole for corporations to be run solely in the interest of their shareholders and for managers to seek to maximize shareholder value. This ideological tension renders contemporary CSR ineffective.

Originality/value

The paper offers a fresh insight or analysis into the transformation of corporations from quasi-social institutions to purely private enterprises in the middle of the nineteenth century. It does this by engaging in a historical narrative of the evolution of the corporate form and how contemporary ideas of shareholder value have resulted in the emergence of a contemporary CSR devoid of the radical spirit of CSR in the 1950s and 1960s.

Citation

Nwoke, U., Ajibo, C.C. and Umahi, T.O. (2018), "Neoliberal shareholder value and the re-privatization of corporations: The disengagement of “transformative” corporate social responsibility?", International Journal of Law and Management, Vol. 60 No. 6, pp. 1354-1376. https://doi.org/10.1108/IJLMA-08-2017-0189