Reconceptualising the Corporate Group: A study examining the legitimacy of Corporate Power

Abstract

Since its inception in 1855, limited liability has been described as one of the greatest inventions of modern times. It has since become central to the functioning of the modern economy. Over recent decades, the use of corporate groups and their respective liability has become the subject of significant debate. This thesis examines English law, construction and subsequent challenges with corporate groups and their respective power. It investigates the mechanisms which have historically been used to control and monitor corporate power and its suitability for the corporate group. Through a corporate social responsibility framework, the thesis seeks to ascertain if these control mechanisms function in the group context, and if not, what is the impact on the legitimacy of power in these corporate groups. In doing so, the current study enriches the understanding of how legitimacy is understood in the context of the corporate group. The precise focus of the thesis is the legitimacy of corporate power wielded by corporate groups. It demonstrates that groups wield power on an illegitimate basis despite a broad governance landscape. This legitimacy deficiency arises from a lack of historical debate, diluted control mechanisms and inflated growth utilising unique features of the corporate group. The thesis explores how power is magnified in the group context and the legitimacy challenges arising from this magnified power. This thesis utilises empirical data to map the current corporate group to identify architectural patterns. It seeks to address the deficiencies by establishing an alternative framework. In so doing, it offers a framework of reconceptualisation toward a pluralist model of the corporation which is supported from the data analysed. Furthermore, it advocates for the use of technology and the capability of said technology to support the implementation of a pluralist conception.