This essay is the Introduction to a volume entitled, 'Understanding the Company: Corporate Governance and Theory,' forthcoming with Cambridge University Press.
In addition to introducing all of the contributions in the volume, the essay surveys the book's main themes: the nature of the company and corporate theory; the diverging schools of thought on conceptualizing the firm; corporate rights and duties; and the means and ends of corporate governance, that is the issue as to who should have the ultimate decision-making power in corporations and for whose benefit corporations should primarily operate.
With society operating increasingly under the dominance of businesses and businesses being exposed to increasingly dense regulation, it has become more imperative than ever to understand today's company ('corporation') and its function and place in society. Defining a company and its accountability too narrowly may have contributed to the last financial crisis, while defining its role too widely can impair its ability to contribute to economic growth. Understanding the company is therefore a continuous mystery and a question in need of an answer. This essay and the chapters in this book thus aim to contribute to a better understanding of the modern company and what its role in society should be.