The Law and the Doctrine of Social Responsibility

The suggestion that businessmen should assume certain broad social responsibilities raises the important question whether businessmen are legally entitled to shape their policies in terms of broad social objectives as distinct from the narrower interests of stockholder-owners. The legal problem is not difficult for unincorporated businesses or even for the incorporated businesses in which ownership and management are closely identified; but it becomes acute in the typical larger corporations owned by thousands of absentee stockholders who have little knowledge of or voice in the management of their enterprises. In conventional legal theory, the directors of such corporations are trustees for