[My friend and occasional sparring partner Jeff Lipshaw sends along a reaction to my post on “who owns the corporation?”]
Typical of most Quora questions, that one is slightly inane, because whether the shareholders "own" the corporation is at least worthy of a thoughtful response like yours, but before you explain to somebody that the CEO doesn't own it, you might need to disabuse them first of a couple Q-Anon theories on the deep state.
So I agree with your legal analysis of "ownership" of the corporation. I agree, for example, that nobody other than a shareholder (not the union, not the government, not customers) has legal standing to complain about whether a board decision is in the best interest of the corporation.
Nevertheless, you ought to include a disclaimer when you say, "the corporation is an aggregation of people bound together by a complex web of contractual relationships." In other words, "the web of contracts" concept is meaningful if you are looking at it through a legal lens. And the legal lens itself imports what a sociologist might call a Gesellschaft view - a modern institution built on ownership rights embodied in law (per Ferdinand Tönnies, in contrast to the tribe or community Gemeinschaft).
Humor me with an analogy. Who owns Detroit? Residents? Taxpayers? Voters? Is a city a thing? Ownership is as illusive a concept there as with the corporation. One way of looking at the city is as an aggregation of people bound together by a complex web of constitutional, statutory, regulatory, and contractual relationships. That is a pretty limited view. There are myriad sociological, historical, political, psychological, anthropological relationships and norms that also have some explanation oomph in characterizing a city. See, e.g., Susan Silbey on snow day placeholders. I agree that most of them don't matter if, for example, the question is whether you are a resident for the purpose of the city income tax.
To hit closer to (your) home, who owns the Roman Catholic Church? I actually litigated something like that years ago regarding some church property in Detroit. Assume the deed to the church property says, “any transfer of this property to one not a true believer in the holy Roman Catholic catechism is void ab initio.” There is a schism in the congregation. The trustees sell the property to Group A. Group B sues to void the transfer on the grounds that the members of Group A do not satisfy the condition. The constitutional law principle is that the court will only look at legal title, and will not enforce a provision that would require it to decide a religious question. So law will give a result, but is that really the right answer in light of all the norms that govern that community?
The same applies to a corporation, which I'd suggest is more than the sum of its legal contracts in the same way that a corporate acquisition is far more than the contracts that document it. (I speak from some personal experience. The lawyers think that they are running things because the funds don’t transfer or the certificate of merger doesn’t get filed until all the conditions of the contract get satisfied, but trust me when I say that the business unit and functional leaders responsible for deriving the synergies don’t see it that way. The documents are the metaphor skeleton of the transaction, but the business consists of organs, muscle, and tissue not reflected there.)
I concede you didn’t take it that far, but I think the “web of contracts” approach makes easier for you to justify the shareholder wealth maximization principle, something about which we have had a nice debate. The utilitarian approach only measures a certain kind of welfare in a certain kind of way and thus itself bespeaks the answer. It’s not a given that it has to be that way: compare European codetermined corporate governance. It’s fair to argue that the SWMP is normatively the way to go, but if you argue it purely from law and economics premises, you should be forthright about the implicit assumptions you’ve made. And the corporation as “web of contracts” invokes those assumptions.
