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Purpose, Values and Governance in Big Tech Companies



The private decisions of the five “Big Tech” (“BT”) companies (Facebook, Apple, Alphabet Inc, Amazon and Microsoft) have very public results as they play a significant role in social, economic and political life. This article explores the purpose of these companies in the context of the current debate about corporate purpose in order to understand their role in society and to explore how they should be governed. The concept of “purpose” has a number of meanings depending on the different contexts and the different disciplines involved in the study. Part II of the article examines the notion of corporate purpose which forms part of a wide-ranging and topical debate as to the interests which should be taken into account by boards in making operational decisions. Often the choice in managing or overseeing the management of the company is framed as a binary choice between acting in the interests of shareholders or acting in the interests of broader stakeholder constituents. In reality, the issue is more nuanced and complex and the quest for an answer extends into a discussion of company law obligations and directors’ duties. The positioning of BT companies in relation to this understanding of purpose is then reviewed. Part III of the article examines what may be viewed as a managerial corporate purpose concept. This constitutes a tool to guide management and to signal “the direction and the reason for the company’s existence”. The use by BT companies of this tool is explored and its usefulness evaluated. Finally, Part IV of the article considers three policy proposals which might be considered in the area of corporate governance: the application of board suitability requirements; the introduction of a public benefit purpose and the use of public interest directors.
Bond University
Bond Law Review
Volume 34 Issue 2
Purpose, Values and Governance in Big Tech Companies
Blanaid Clarke
Trinity College Dublin
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This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0
Purpose, Values and Governance in Big
Tech Companies
I Introduction
The term Big Tech’ (‘BT) is generally used in reference to the five
major technology companies, namely Meta Platforms Inc. (previously
Facebook), Apple Inc., Alphabet Inc. (owner of Google),
Inc. and Microsoft Corp. (the BT companies).1 Below them, a second
tier of companies include Twitter Inc, Netflix Inc., Tesla Inc. and
Spotify Ltd. BT companies dominate their respective sectors. These
companies grew in size and importance during the Pandemic and at the
end of 2021 constituted 23% of the S&P 500 index.2 Apple became the
first company to hit a $3 trillion market capitalisation in early January
2022. Since then, despite market volatility caused by global tensions,
inflation, rising interest rates, supply chain problems and regulatory
intervention risks, these companies remain amongst the largest global
companies in terms of market capitalisation and revenues.
The private decisions of BT companies have very public results as
they play a significant role in social, economic and political life. They
contribute to digital value creation facilitating new business ventures
and connections. During the Pandemic, they helped to keep the
economy afloat and society connected’.3 Online platforms introduced
misinformation warning systems; removed an increased amount of
content; and co-operated on COVID-19 tracking apps to work on a
range of mobile devices. On the other hand, online platforms have been
disruptive forces leading to significant changes in market conditions,
business practices and labour relations and creating new strategic
dependencies. It has been said that the internet has ‘fundamentally
* McCann FitzGerald Chair of Corporate Law, Trinity College Dublin
The author wishes to acknowledge the editorial assistance (and perseverance) of Olivia
Wilson particularly in respect of the AGLC4 citation formatting.
1 The large Chinese tech firms including Baidu, Alibaba, Tencent and Xiaomi fall beyond the
scope of this review.
2 Ryan Vlastelica, Big Tech Adds $2.5 Trillion in Value on Robust 2021 Gains’,
(online, 31 December 2021) <
3 Chris Meserole, ‘COVID-19 and the Future of ‘Techlash’’,
(online, 27 April 2020)
36 Bond Law Review (2022)
changed the way we do just about everything’.4 The business model of
the large online platforms has been criticised as unorthodox and
exploitative for its reliance on harvesting consumer data to optimize
consumer engagement. 5 A number of these platforms have been
accused of complicity in: subverting democratic processes; anti-
competitive practices; breaching privacy rights; monetising human
experiences; manipulating vulnerable users; cornering artificial
intelligence; and failing to take pre-emptive action against mis-
information and on-line bullying. 6 The storming of the Capitol
buildings in Washington on 6 January 2021 exemplified both the power
of BT companies and the attendant risks. While there is a growing
awareness of the need for more responsible behaviour by BT companies,
the means by which this is achieved remains the focus of much debate.7
It is not of course the case that BT companies are unregulated.
Meta’s 2021 Annual Report lists an impressive array of laws and
regulations in the U.S. and abroad to which the company is subject. It
refers to laws and regulations involving:
matters including privacy, data use, data protection and personal
information, biometrics, encryption, rights of publicity, content,
intellectual property, advertising, marketing, distribution, data security,
data retention and deletion, data localization and storage, data disclosure,
artificial intelligence, electronic contracts and other communications,
competition, protection of minors, consumer protection, civil rights,
telecommunications, product liability, e-commerce, taxation, economic or
other trade controls including sanctions, anti-corruption and political law
compliance, securities law compliance, and online payment services. In
particular, we are subject to federal, state, and foreign laws regarding
privacy and protection of people's data.8
4 Paul Fletcher,
Governing in the Internet Age in the National Interest
(Monash University
Publishing, 2021).
5 See Frank Pasquale,
The Black Box Society: The Secret Algorithms that Control Money and
3 (Cambridge University Press, 2015); Tim Wu,
The Attention Merchants: The
Epic Scramble to Get Inside Our Heads
(Knopf, 2016) 211; P.M. Vasudev,
Shareholder Value: A Framework for Stakeholder Governance Corporations
(Elgar, 2021) 296.
6 See, eg, R. Foroohar,
Don’t be Evil
(Currency, 2019); S. Zuboff,
The Age of Surveillance
(Penguin, 2019); Fletcher (n 4); Bhaskar Chakravorti Biden’s ‘Antitrust
Revolution’ Overlooks AIat Americans’ Peril’,
(online, 27 July 2021)
americans-peril/>; Trautman, Lawrence J., Governance of the Facebook Privacy Crisis (2020)
Pittsburgh Journal of Technology Law & Policy
7 For example, while a bipartisan subcommittee of the US House Judiciary Committee in 2020
in its report on competition in digital markets found that Amazon, Apple, Facebook, and
Google had stifled competition unfairly in different ways, its final report demonstrates partisan
division over its recommendations and the role of regulation. See
8 Meta Platforms,
Meta Platforms, Inc Annual Report for the Fiscal Year Ended December 31,
2021 (Form 10-K)
(Report, 2021) 8.
Vol 34(2) Purpose, Values and Governance in Big Tech Companies 37
The Report warns that many of these regulations are still evolving and
could be interpreted and applied inconsistently in different countries
and inconsistently with its current policies and practices. It cited as an
example that regulatory or legislative actions affecting the manner in
which it displays content to users or obtains consent to various practices
could adversely affect our financial results’. 9 Whilst this is
undoubtedly true and represents a legal risk of which all investors
should be aware, it does set up a narrative in which the commercial
interests of the company are portrayed as potentially inconsistent with
the objectives of the regulators and legislators objectives which we
might assume relate to protecting the economy or sectors of the public.
This article explores the purpose of BT companies in the context of
the current debate about corporate purpose in order to understand their
role in society and to explore how best to manage or regulate them. The
concept of ‘purpose’ has a number of meanings depending on the
different contexts and the different disciplines involved in the study.10
Part II of the article examines the notion of corporate purpose which
forms part of a wide-ranging and topical debate as to the interests which
should be taken into account by boards in making operational decisions.
Often the choice in managing or overseeing the management of the
company is framed as a binary choice between acting in the interests of
shareholders or acting in the interests of broader stakeholder
constituents. In reality, the issue is more nuanced and complex and the
quest for an answer extends into a discussion of company law
obligations and directors’ duties. The positioning of BT companies in
relation to this understanding of purpose is then reviewed. Part III of
the article examines what may be viewed as a managerial corporate
purpose concept. This constitutes a tool to guide management and to
signal what Holger Fleischer describes as the direction and the reason
for the company's existence’.11 The use by BT companies of this tool is
explored and its usefulness evaluated. Part IV of the article next
considers various policy proposals which might be considered in the
area of corporate governance: the application of board suitability
requirements; the introduction of a public benefit purpose and the use
of public interest directors.
9 Ibid 9.
10 Edward Rock argues that the debate over corporate purpose involves a blurring of four
separate questions: “what is the best theory of the legal form we call “the corporation? how
should academic finance understand the properties of the legal form when building models or
engaging in empirical research? what are good management strategies for building valuable
firms? “what are the social roles and obligations of large publicly traded firms?. See Edward
For Whom is the Corporation Managed in 2020?: The Debate Over Corporate Purpose
(Law Working Paper No. 515/2020, European Corporate Governance Institute, 1 May 2020)
11 Holger Fleischer,
Corporate Purpose: A Management Concept and its Implications for
Company Law
(Law Working Paper No. 561/2021, European Corporate Governance Institute,
21 January 2021) 8 <>.
38 Bond Law Review (2022)
II Corporate Purpose In Whose Interests Should the
Company Be Run?
In a very fundamental sense our understanding of the concept of
corporate purpose is related to a question which has dominated
corporate governance for over 90 years - in whose interests should
companies be run? Adolf Berle and Gardiner Means envisaged a
modern corporation which served not only its owners or controllers but
all society a purely neutral technocracy, balancing a variety of claims
by various groups in the community’.12 This stakeholder approach was
countered in the mid-1970s by a shareholder primacy norm generally
linked to Milton Friedman who described the social responsibility of
business as being to increase its profits.13 The norm is generally
regarded as applying in relation to companies based in Anglo-Saxon
jurisdictions including the U.S., the U.K., Australia, Canada and New
Zealand.14 Indeed Henry Hansmann and Reiner Kraakman went so far
as proclaiming twenty years ago that there was ‘no longer any serious
competitor to the view that corporate law should principally strive to
increase long-term shareholder value.15 The main criticism levelled
against shareholder primacy is that it forces management to adopt a
short time horizon in response to the demands of the financial markets
leading to share buybacks to sustain share prices, excessive dividends
and a reduction in research and development. 16 It has also been
described as the greatest barrier to progress on the promotion of
environmental sustainability in company law.17 There has been strong
push-back against these views however18 and Jesper Lau Hansen set out
a contrary response on the short-termism argument as follows:
In respect of shares, their value is determined at any given point in time by
assessing their long-term value and return at that point in time. There is no
12 Adolf Berle and Gardiner Means,
The Modern Corporation and Private Property
Publishers, 1991; first published 1932) 312.
13 Milton Friedman, The Social Responsibility of Business is to Increase its Profits,
New York
(online, 13 September 1970) <
14 Andrew Keay Tackling the Issue of the Corporate Objective: An Analysis of the United
Kingdom’s ‘Enlightened Shareholder Value Approach’’ (20 11) 29
Sydney Law Review
15 Henry Hansmann and Reiner Kraakman, The End of History for Corporate Law(2001) 89
Georgetown Law Journal
439, 439.
16 Ernst & Young,
Study on Directors' Duties and Sustainable Corporate Governance
Report, European Commission, July 2020) <
/publication/e47928a2-d20b-11ea-adf7-01aa75ed71a1/language-en>. Cf Jesse Fried and
Charles Wang,
Short-Termism and Capital Flows
(Law Working Paper No. 342/2017,
European Corporate Governance Institute, 14 November 2018)
17 Beate Sjåfjell et al, ‘Shareholder Primacy: The Main Barrier to Sustainable Companies in
Beate Sjåfjell and Benjamin Richardson (eds),
Company Law and Sustainability: Legal
Barriers and Opportunities
, (Cambridge University Press, 2015) 79.
18 Mark Roe,
Missing the Target: Why Stock-Market Short-Termism Is Not the Problem
University Press, 2022).
Vol 34(2) Purpose, Values and Governance in Big Tech Companies 39
short-termism behind investing as it is always done with a view to the long
It is important to recognise that there is no definite consensus as to the
extent to which the interests of only shareholders may be considered
and the need to distinguish between share price maximisation and long
term shareholder value.20
The UK’s Company Law Review Steering Group, an independent
expert body established in 1998 by the UK Government to look into
company reform, considered and consulted upon the correct approach
to adopt. While it concluded that the ultimate objective of companies is
to generate maximum wealth for their shareholders, it advocated an
‘enlightened shareholder value approach which rejected an ‘exclusive
focus on the short-term financial bottom line’.21 It proposed that the
basic goal for directors should be the success of the company for the
benefit of its shareholders as a whole and that to reach this goal,
directors would need to take a properly balanced view of the
implications of decisions over time and foster effective relationships
with employees, customers and suppliers, and in the community more
widely. The Government accepted that this approach was most likely
to drive long-term company performance and maximise overall
competitiveness and wealth and welfare for all22 and section 172(1) of
the Companies Act 2006 was thus introduced. It provides:
A director of a company must act in the way he considers, in good faith,
would be most likely to promote the success of the company for the benefit
of its members as a whole, and in doing so have regard (amongst other
matters) to
(a) the likely consequences of any decision in the long term,
(b) the interests of the company's employees,
(c) the need to foster the company's business relationships with suppliers,
customers and others,
(d) the impact of the company's operations on the community and the
19 Jesper Lau Hansen et al,
Response to the Study on Directors’ Duties and Sustainable Corporate
Governance by Nordic Company Law Scholars
(Law Research Paper No. 100, University of
Copenhagen, 13 October 2020) <>.
20 See, eg, Dorothy Lund and Elizabeth Pollman, ‘The Corporate Governance Machine(2021)
Columbia Law Review
2563; Tim Connor and Andrew O’Beid,Clarifying Terms in the
Debate Regarding “Shareholder Primacy”’ (2020) 35
Australian Journal of Corporate Law
21 The Company Law Review Steering Group
, Modern Company Law for a Competitive
Economy: The Strategic Framework
(Department of Trade and Industry, 1999) 37.
Company Law Reform
(White Paper, 2005) 20
40 Bond Law Review (2022)
(e) the desirability of the company maintaining a reputation for high
standards of business conduct, and
(f) the need to act fairly as between members of the company.
During the UK Parliamentary debates, Minister Margaret Hodge
explained that the words have regard to are not about ticking boxes
and that they mean ‘give proper consideration to’. Although section
172 lists the key stakeholders, the phrase for the benefit of its members
does the heavy lifting and is key to understanding the approach. In order
to benefit shareholders, the other constituent groups should be
considered. 23 In other words, enlightened shareholder value is still
about shareholders and treats their benefit as supreme’. 24 A more
pluralist stakeholder perspective might have omitted this phrase and
allowed the focus to be the success of the company balancing all the
different stakeholders interests equally. In order to ensure directors paid
more than lip service to the mandated consideration of the various
interests set out in section 172(1)(a)-(f), the Companies (Miscellaneous
Reporting) Regulations 2018 was introduced. It requires directors to
explain how they have had regard to these various matters in performing
their duty to promote the success of the company in this section.
Two of the most influential scholars in the field at present, UK
academics Colin Mayer and Alex Edmans, have called for companies
to simultaneously seek to benefit stakeholders and to generate profit.25
Edmans explains purpose as something which defines who the
enterprise is for and why it exists.’26 He advocates ‘pieconomics’ as an
approach to business that seeks to create profits only through creating
value for society.27 Mayer and his colleagues in the British Academy’s
Future of the Corporation project advocate requiring companies to
identify and commit to a corporate purpose beyond profit or in addition
to profit. He describes this idea of corporate purpose as one involving
a normative notion to it, in terms of the role of business in society and
the obligations of business to future generations as well’.28 Mayer
proposes introducing a legal requirement for companies to incorporate
their corporate purpose in their articles of association and to then
demonstrate how their conduct and their corporate structures promote
this purpose. These are not lone voices. For example, Jaap Winter, the
Dutch scholar and previously chairman of the High Level Group of
23 United Kingdom,
Parliamentary Debates
, House of Commons, 17 October 2006, 788-789
(Margaret Hodge).
24 P.M. Vasudev,
Beyond Shareholder Value: A Framework for Stakeholder Governance
(Elgar, 2021) 32.
25 Colin Mayer,
Prosperity: Better Business Makes the Greater Good
(2018, Oxford University
Press); Alex Edmans,
Grow the Pie: How Great Companies Deliver Both Purpose and Profit
(Cambridge University Press, 2020).
26 Ibid 223.
27 Ibid 27.
28 James Rivington, Interview with Colin Mayer’ (2017) 30
British Academy Review
24, 29.
Vol 34(2) Purpose, Values and Governance in Big Tech Companies 41
Company Law Experts (set up by the European Commission in 2001 to
advise it on a modern regulatory framework for company law in
Europe), opined that:
If corporations want to reconnect with society, they will have to be explicit
about their ultimate objective, what value they will add to society.
Generating shareholder value should not be the objective of this process,
but a consequence.29
Outside academia too, there have been calls for a move to a more
pluralistic purposive approach. In 2018, Larry Fink the influential CEO
of Blackrock, the world’s largest asset manager, titled his annual letter
to CEOs
A Sense of Purpose
and in it he emphasised:
Without a sense of purpose, no company, either public or private, can
achieve its full potential. It will ultimately lose the license to operate from
key stakeholders. It will succumb to short-term pressures to distribute
earnings, and, in the process, sacrifice investments in employee
development, innovation, and capital expenditures that are necessary for
long-term growth. It will remain exposed to activist campaigns that
articulate a clearer goal, even if that goal serves only the shortest and
narrowest of objectives. And ultimately, that company will provide subpar
returns to the investors who depend on it to finance their retirement, home
purchases, or higher education.30
In 2019, Martin Lipton describing capitalism as ‘at an inflection point’
sought the support of companies, asset managers, and institutional
investors for a New Paradigm. This invited boards and senior
managers to identify and articulate their companies purposes ‘ensuring
that the company pursues sustainable long-term value creation’.31 It
described their purposes as their objectives and contributions to
societal and public interestsclaiming, like Winter, that profits are not
the raison d’être of a company, but rather are a product of its pursuit of
its corporate purposes.32 The same year, the Business Roundtable
(‘BRT), an association of CEOs of the largest US companies, published
Statement on the
Purpose of a Corporation
signed by 181 CEOs
committing to lead their companies to the benefit of all stakeholders.33
This achieved significant attention and was described in the New York
29 Jaap Winter, Dehumanisation of the Large Corporation (2020)
30 Available at <
31 Martin Lipton et al, It’s Time to Adopt the New Paradigm (2019) 9
The original version was published in 2016.
32 Ibid 16.
33 Statement on the Purpose of a Corporation,
Business Roundtable
(Web Page, 19 August
2019) <>. As of July 2021, the
statement had 243 signatories. See, <
42 Bond Law Review (2022)
Times as an explicit rebuke of Friedman’s doctrine of shareholder
primacy and a commitment to a more stakeholder oriented approach.34
Forbes described it as a revolutionary corporate governance pact’.35
Edward Rock has attributed this paradigm shift to a recognition of
political dysfunction stemming from both the Global Financial Crisis
and governmental failures to address societal issues such as climate
change, poverty and inequality. 36 Leo Strine described the BRT
statement not as the start of something but rather a recognition that
an economic system that is so skewed toward the few will not continue
to be tolerated by the many.37 Indeed Fink’s letter itself referred to
many governments failing to prepare for the future and that society
increasingly is turning to the private sector and asking that companies
respond to broader societal challenges. Fink’s subsequent annual
letters to CEOs have continued to focus on stakeholders, proclaiming
in 2021 The more your company can show its purpose in delivering
value to its customers, its employees, and its communities, the better
able you will be to compete and deliver long-term, durable profits for
shareholders.38 In 2022, Fink described as the foundation of
stakeholder capitalism, companies which have a clear sense of purpose;
consistent values; and, crucially, they recognize the importance of
engaging with and delivering for their key stakeholders’.39 This change
of mood in the market resonates with the sentiments expressed in the
Davos Manifesto 2020
at the World Economic Forum promising a
better kind of capitalism’.40 This Manifesto described the purpose of a
company as being to engage all its stakeholders in shared and sustained
value creation. Companies, especially multinationals, were asked to
take responsibility to work with governments and civil society to
address big global challenges.
34 David Gelles and David Yaffe-Bellany, ‘Shareholder Value Is No Longer Everything, Top
C.E.O.s Say’,
New York Times
(online, 19 August 2019)
35 Carmille Nicita, ‘Are Companies Rising to the Occasion? Why 181 CEOs Signed a
Revolutionary Corporate Governance Pact’,
(online, 17 October 2019)
36 Rock (n 10).
37 Leo Strine,
Restoration: The Role Stakeholder Governance Must Play in Recreating a Fair
and Sustainable American Economy - A Reply to Professor Rock
(Law and Economics
Working Paper No. 637, Columbia Law School, 15 December 2020) 28
38 Available at <>.
39 Ibid.
40 Klaus Schwab, ‘Davos Manifesto 2020: The Universal Purpose of a Company in the Fourth
Industrial Revolution’,
World Economic Forum
(online, 2 December 2019)
Vol 34(2) Purpose, Values and Governance in Big Tech Companies 43
This apparent epiphany has not been without its sceptics. In an
article entitled The New Elite’s Phoney Crusade to Save the World
Without Changing Anything’,41 the Guardian newspaper published an
extract from Anand Giridharadas’ book
Winners Take All: The Elite
Charade of Changing the World.42
In the book, he is scathing in his
criticism for these attempts at social change as reflecting:
a highly influential view that the winners of an unjust status quo and the
tools and mentalities and values that helped them win are the secret to
redressing the injustices. Those at greatest risk of being resented in an age
of inequality are thereby recast as our saviours from an age of inequality.43
Somewhat surprisingly perhaps in this context, the 2022 Edelman Trust
survey of over 36,000 people in 28 countries found that at 61% business
is the most trusted institution ahead of NGOs (59%) and Government
(52%).44 Respondents wanted businesses to provide societal leadership
and to engage more on all issues with 52% saying business was not
doing enough on climate change and only 9% saying it was
overstepping. That said, the motivation of business leaders and the
likelihood of change has also been questioned. Jesse Fried voiced the
view of many that the signatories to the BRT Statement were merely
paying lip service to broader social concerns and would not affect how
they run their companies.45 Andrew Winston, an international expert
on green business strategy, opined that it was hard to take some of the
signatures to the BRT Statement seriously, which he said somewhat
undermines the whole effort. He cited ExxonMobil as an example
noting it has spent decades questioning climate science and slowing
global action …How much could a company like that care about
‘stakeholders’? 46 Other critics were concerned that the additional
discretion given to directors to engage in stakeholder protection
measures might be abused and might diminish their accountability to
shareholders by allowing them to justify any action on the basis that
they were merely acting in the interests of stakeholders. Stephen
Bainbridge opined that Directors who are responsible to everyone are
41 Anand Giridharadas,
(online, 22 January 2019)
42 (Penguin Random House UK, 2019).
43 Ibid 5-6.
44 Available at <>.
45 Fried expressed the view that this was actually a good thing because “shareholder primacy is
what keeps managers accountable and allows capital to flow where it is needed in the economy”
and is also “hard-wired” into these companies’ corporate charters. See Jesse Fried,
Shareholders Always Come First and That’s a Good Thing
Financial Times
(online, 7
October 2019) <>.
46 Andrew Winston, Is the Business Roundtable Statement Just Empty Rhetoric?
Business Review
(online, 30 August 2019) <
44 Bond Law Review (2022)
accountable to no one.47 There were also fears that, in promising more
than they deliver, these types of voluntary initiatives might reduce
demand for meaningful legal and regulatory reforms that could
effectively protect stakeholders’.48
To test the sincerity and meaningfulness of the BRT Statement,
Lucian Bebchuk and Roberto Tallarita undertook a study of corporate
documents including corporate governance guidelines from 136 U.S.
public companies whose CEOs signed the statement.49 On the positive
side, they found that 120 companies had specific language concerning
the purposes and objectives that could guide their boards in making
their decisions and serving their constituencies. However, they found
little evidence that these companies overturned their endorsement of
shareholder primacy and embraced a stakeholderist purpose or indeed
that they expected to bring about any material changes in how
stakeholders would be treated. In fact, a majority of companies did not
include any mention of stakeholders in their discussion of corporate
purpose and a majority reflected a shareholder-centered view. The
authors concluded that:
rather than produce material benefits to stakeholders, the main impact of
such pledges might be to insulate corporate leaders from shareholders and
to deflect outside pressures to adopt governmental measures that would
truly serve stakeholders.50
This supports the view that the BRT Statement was more of a public
relations exercise than a real commitment to change. It should be noted
that the methodology used in the survey has been the subject of
criticism for its focus on corporate documents. Martin Lipton argued
that evidence of stakeholder commitment and engagement is unlikely
to be found in these documents and policies and he refers to
stakeholder-facing initiatives such as Dell Technologies and HP Inc.’s
commitment to benchmark their performance against standardized
stakeholder capitalism metrics.51 He notes that ‘absence of proof is not
proof of absenceespecially when one is looking for proof in the
wrong place. While it is of course important to examine whether
companies are walking the walk, it is important that they are talking
the talk and, as will be discussed below, signalling their intentions to
47 Stephen Bainbridge, ‘Much Ado About Little? Directors' Fiduciary Duties in the Vicinity of
Insolvency’ (2007) 1
Journal of Business & Technology Law
336, 355.
48 Lucian Bebchuk and Roberto Tallarita, ‘The Illusory Promise of Stakeholder Governance
(2020) 106
Cornell Law Review
91, 114 <>.
49 Lucian Bebchuk and Roberto Tallarita,
Will Corporations Deliver Value to All Stakeholders?
(Law Working Paper No. 645/2022, European Corporate Governance Institute, 4 August 2021)
50 Ibid 53.
51 Martin Lipt on, More Myths from Lucian Bebchuk',
Harvard Law School Forum on Corporate
(online, 24 August 2021) <
Vol 34(2) Purpose, Values and Governance in Big Tech Companies 45
potential investors, investors, customers and other stakeholders. The
whole idea of a purpose statement is to articulate the company’s
purpose clearly so that everyone might understand the company’s
priorities and the manner in which it makes its decisions. For this reason,
it has been argued convincingly ‘purpose and values hold management
to account to a degree that enlightened long-term shareholder value
cannot’.52 On this basis, the role of the board and its relationship with
all its stakeholders should have been set out clearly in the
documentation reviewed by Bebchuk and Tallarita.
An interesting initiative based on the need for clarity and
measurability of corporate purpose is set out in a report entitled
Measuring Stakeholder Capitalism: Towards Common Metrics and
Consistent Reporting of Sustainable Value Creation
.53 With support
from 140 CEOs of the world’s largest companies and in collaboration
with Deloitte, EY, KPMG and PwC, the World Economic Forum is
seeking to translate principles and aspirations into tangible and
measurable goals. Examining a theme of Governing Purpose under the
core Environmental, Social and Governance (ESG) metrics, the report
cites Mayer and the British Academy. It explains that oversight of a
company’s ESG priorities requires a clear understanding and
articulation of the company’s purpose providing a useful baseline for
whether firms are pursuing purpose or not’. 54 The report defines the
company’s stated purpose as the expression of the means by which a
business proposes solutions to economic, environmental and social
issues whilst ensuring that it is not profiting from creating problems
in these domains’.55 It states that this corporate purpose should create
value for all stakeholders, including shareholders maintaining that the
more that firms can link their purpose and core business, the better they
can deliver long-term value for all stakeholders, including
shareholders.56 The report also cites emerging evidence that ‘purpose-
led firms outperform their peers in terms of shareholder value and are
better positioned to account for and deliver economic, environmental
and social value’.57
52 Colin Mayer, ‘Shareholderism Versus Stakeholderism - A Misconceived Contradiction: A
Comment on "The Illusory Promise of Stakeholder Governance" by Lucian Bebchuk and
Roberto Tallarita (2021) 106
Cornell Law Review
Measuring Stakeholder Capitalism Towards Common Metrics and Consistent Reporting of
Sustainable Value Creation
(White Paper, World Economic Forum, September 2020)
54 Ibid 49.
55 Ibid.
56 Ibid.
57 Ibid citing Michael Porter, George Serafeim and Mark Kramer, Where ESG Fails’,
Institutional Investor
(online, October 2019)
46 Bond Law Review (2022)
This debate on corporate purpose has continued and even grown in
intensity in the last two years including interventions from the European
Commission58 and the European Parliament on
Sustainable Corporate
59 focussing on long-term value creation and the alignment
of corporate and societal objectives. The European Commission’s
initiative was based on a study by EY into the root causes of short
termism in corporate governance which includes proposals for EU
wide solutions.60 The study identified an overly narrow interpretation
of directors’ duties and company’s interests across the EU tending to
favour the short term maximisation of shareholder value together with
growing pressures from investors with a short-term horizon.61 The
study encouraged inter alia intervention at an EU level to strengthen the
role of directors in pursuing their company's long-term interests and to
dispel current misconceptions and errors in relation to the purpose of
the company and the duties of directors. Its authors opined that
‘Without action, the shareholder primacy norm will persist in current
regulatory frameworks, and continue being an obstacle to change
towards more sustainable, long-term oriented business practices’.62 The
most efficient option it identified would require directors to: ‘properly
balance the following interests, alongside the interest of shareholders,
when acting in the interest of the company: long-term interests of the
company (beyond 5-10 years); interests of employees; interest of
customers; interest of local and global environment; interest of society
at large. The study was heavily criticised in the academic community
for perceived methodological flaws as well as its assumption that
shareholder value creation is a short-term phenomenon. 63 The
European Commission and the study were criticised in particular for:
conflating companies’ horizons and their objectives; suggesting that
shareholders are only concerned with short-term value; and opining that
58 Sustainable Corporate Governance Initiative’,
EU Commission
(Web Page)
European Parliament Resolution of 17 December 2020 on Sustainable Corporate Governance
[2021] OJ C 445 E/94
Study on Directors' Duties and Sustainable Corporate Governance
(Final Report, European
Commission, July 2020) <
61 The EY Study cites Sjåfjell et al (n 17).
62 Ibid 61.
63 See, eg,
Feedback on the Sustainable Corporate Governance Initiative Consultation
(Sustainable Corporate Governance Initiative, European Company Law Experts, September
2020) <
Sustainable-corporate-governance/F555384_en>; European Commission Initiative on
Directors' Duties and Sustainable Corporate Governance Series’,
Oxford Business Law Blog
(online, 8 October 2020 et seq) <
Cf Beate Sjåfjell and Jukka Mähönen,
Corporate Purpose and the Misleading Shareholder vs
Stakeholder Dichotomy
(Research Paper No. 2022-43, University of Oslo Faculty of Law,
February 2022) <>.
Vol 34(2) Purpose, Values and Governance in Big Tech Companies 47
the pursuit of shareholders’ interests must come at the expense of other
stakeholders’ interests.64 In February 2022, the European Commission
followed up by publishing a proposed Directive on Corporate
Sustainability Due Diligence65 with a reduced focus on directors’ duties
and a narrower scope of companies.66 Article 25(1) requires directors
to ensure that, when fulfilling their duty to act in the best interest of the
company, they take into account the consequences of their decisions
for sustainability matters, including, where applicable, human rights,
climate change and environmental consequences, including in the short,
medium and long term’. 67 This resembles more the enlightened
shareholder value described above and its impact clearly depends on
how the term the interests of the companyis interpreted. Whether one
views this amendment as a genuine attempt to balance interests or as
indication of defeat to pressure from lobbyists,68 it is the case that the
prescribed timelines are vague and the manner of its interpretation and
enforcement would be a matter of national law. Concerns have been
expressed too that it would lead to the entrenchment of management
and a diminution in accountability to shareholders.69 It is clear that the
differences in viewpoints which existed at the outset of this debate still
remain and at the time of writing, it seems likely that this provision will
be dropped from the final draft.
Turning now to the purpose of BT companies, one can see that many
BT companies have publicly expressed a commitment to stakeholders.
Apple, Amazon and Microsoft are all signatories of the BRT Statement.
However, if we review the Corporate Governance Guidelines of the five
BT companies in Table 1 below, they suggest a shareholder centric
64 Alex Edmans et al, Call for Reflection on Sustainable Corporate Governance,
The European
Corporate Governance Institute
(online, 7 April 2021) <
Proposal for a Directive of the European Parliament and of the Council on Corporate
Sustainability Due Diligence and Amending Directive
, (Proposal, European Commission, 23
Feburary 2022) <
66 Article 2(1).
67 Article 26 also imposes a duty on directors of EU companies to set up and oversee the
implementation of corporate sustainability due diligence processes and measures and to adapt
the corporate strategy to due diligence.
68 Pablo Grandjean, Commission Bends to Lobby Pressure on Sustainable Corporate
Finance Watch
(online, 23 February 2022) <
69 Erik Lidman, ‘The Role of Corporate Governance in Sustainability and Why the
Commission’s CSDDD Proposal Might Do More Harm Than Good’,
Oxford Business Law
(online, 27 April 2022) <
48 Bond Law Review (2022)
Table 1
Role of BT Boards
Corporate Governance Guidelines: Role of the Board
The Board’s primary purpose is to build long-term
shareowner value70
[The Board has adopted these Guidelines] to reflect the
Board’s strong commitment to sound corporate governance
practices and to encourage effective policy and decision
making at both the Board and management level, with a
view to enhancing long-term value for Meta shareholders.71
[The Board] assures that the long-term interests of the
shareholders are being served’.72
The fundamental responsibility of the directors is to
exercise their business judgment to act in what they
reasonably believe to be the best interests of Alphabet and
its stockholders. It is the duty of the Board to oversee
management’s performance to ensure that Alphabet operates
in an effective, efficient and ethical manner in order to
produce value for Alphabet’s stockholders.73
Shareholders elect the Board to oversee management and to
assure that shareholder long-term interests are served74
It might be the case of course that these references to the long-term
interests of shareholders reflect a commitment to enlightened
shareholder value rather than shareholder primacy and in this way, they
promote the wellbeing of both investors and stakeholders. However,
with the exception of Microsoft, this is not expressly stated in the
Corporate Governance Guidelines and there is no express reference
therein to other stakeholder’s interests in this context. Microsoft’s
Corporate Governance Guidelines clearly explain that:
The Board recognizes that the long-term interests of shareholders are
advanced by responsibly addressing the concerns of other stakeholders
including employees, customers, suppliers, government, and the public.
70 Guidelines on Significant Corporate Governance Issues’,
Amazon Inc
(Web Page)
71 Corporate Governance Guidelines’,
(Web Page, 3 April 2022)
72 Corporate Governance Guidelines,
(Web Page, 19 August 2020)
73 Corporate Governance Guidelines’,
(Web Page, 20 April 2022)
74 Corporate Governance Guidelines,
(Web Page, 16 August 2022)
Vol 34(2) Purpose, Values and Governance in Big Tech Companies 49
There is no mention in the Corporate Governance Guidelines of any of
the companies to the means by which a commitment to shareholders or
stakeholders might be measured. P.M. Vasudev argued that shareholder
value has allowed companies like Amazon and Tesla to grow in size
and power without viable operations as conventionally understood
and undermining fair competition.75He argues convincingly that these
developments warrant an appropriate public policy response’.76 Such
a response will be considered further below.
As a condition of their listing, the BT companies must comply with
NASDAQ’s corporate governance requirements.77 Although there is no
reference to culture or corporate purpose in these requirements, every
company must adopt a code of conduct applicable to all directors,
officers and employees. In these codes, there are references to a broader
range of stakeholders. These are important commitments. For example,
Meta’s Code of Conduct refers to a deep responsibility to each other,
to the communities we serve and to the world and it sets out the manner
in which it expects all personnel to do so. 78 This includes; supporting
staff; protecting and empowering customers; competing and
collaborating fairly; and building trust with society, governments,
regulators and local communities. Compliance with the Codes is
monitored by the companies themselves and in this sense is a form of
self-regulation. Violations the Codes note may result in disciplinary
action, up to and including termination of employment or assignment.
III Corporate Purpose Mission-Purpose Statements
The concept of corporate purpose is also used in a slightly different
context, outside the normative stakeholderism/shareholder primacy
debate discussed above and separate from the question of the legal
purpose of the company. It involves the use of a Mission Statement
setting a mission purpose. Bain & Co, the management consultancy
firm, describe a Mission Statement as a statement which defines the
company’s business, its objectives and its approach to reach those
objectives’.79 It is viewed as a strategic management tool identifying
75 P.M. Vasudev,
Beyond Shareholder Value: A Framework for Stakeholder Governance
(Elgar, 2021) 296-297.
76 Ibid 297.
77 Listing Rules 5600 Series - Corporate Governance Requirements’,
(Web Page)
Keep Building Better: The Facebook Code of Conduct
(Web Page, 2019) 4
79 Management Tools Mission and Vision Statements’,
Bain & Company
(Web Page, 2 April
2018) <>.
It is distinguished from a “vision statement” which sets out “the desired future position of the
50 Bond Law Review (2022)
the scope of its operations and reflecting its values and priorities.80 In
this context, Grant Thornton, the business advisory firm, explain that:
Purpose is the reason you exist, and/or the impact a company intends to
have over a sustained period of time. It sits at the core and drives decision-
making clarity, inspires those that work with you and helps guide long-term
strategy. A constant purpose is a bedrock to build on and the North Star to
guide you.
UK Corporate Governance Code
2018 (the Code) produced by
the Financial Reporting Council in the UK (FRC) adopts a similar
approach and highlights the importance of the board identifying a
company’s purpose and values and ensuring that these are aligned with
its culture. 81 Acknowledging that strong governance underpins a
healthy corporate culture, the FRC has argued that a healthy culture
both protects and generates valueand it has focused on the board’s role
in shaping and steering corporate behaviour to create a culture that will
deliver sustainable performance.82 Although the Code does not define
the term ‘purpose’, the
Guidance on Board Effectiveness
, which
accompanies it, describes a company's purpose as ‘the reason for which
it exists’.83 It advises that a well-defined purpose will help companies
to articulate their business model, and develop their strategy, operating
practices and approach to risk and will often facilitate engagement with
employees, customers and the wider public.84 Establishing a company’s
overall purpose is also said to be ‘crucial in supporting the values and
driving the correct behaviours’. 85 While the Code itself is not
prescriptive in terms of purpose or values, the FRC has noted that
‘companies are recognising the value in defining and communicating a
broader purpose beyond profit which generates wealth and delivers
benefits to society as a whole.’86 In reference to section 172, discussed
above, the FRC notes that while conflicts will arise between the
interests of different stakeholders where there is a broad alignment
between their objectives, a focus on how business is conducted and how
stakeholders are treated will create opportunities for value creation that
80 See James Rajasekar, A Comparative Analysis of Mission Statement Content and
Readability’ (2013) 14
Journal of Management Policy and Practice
UK Corporate Governance Code 2018
(Financial Reporting Council, 2018) 4
Corporate-Governance-Code-FINAL.pdf> (‘
UK Code
Corporate Culture and the Role of Boards
(Report of Observations, Financial Reporting
Council, July 2016) <
tagged.pdf> (‘
Corporate Culture
Guidance on Board Effectiveness
(Financial Reporting Council, July 2018) 3
Guidance-on-Board-Effectiveness-FINAL.PDF> (‘
Guidance on Board Effectiveness
84 Ibid.
Corporate Culture
(n 82) 2.
Guidance on Board Effectiveness
(n 83) 9.
Vol 34(2) Purpose, Values and Governance in Big Tech Companies 51
have mutually reinforcing benefits for all’. 87 The Code has also
described the role of the board as to promote the long-term sustainable
success of the company, generating value for shareholders and
contributing to wider society’.88 David Kershaw and Edmund Schuster
suggest that the meaning of the termpurpose’ in the Code need not be
interpreted to have the identical meaning to the way it is deployed in
section 172 of the Companies Act 2006 although they accept that it
cannot be interpreted in such a way as to give rise to conflicts between
it and company law.89 They view the Code’s mission purpose as less
far-reaching describing it an animated version of what it does; a
corporate and societal mission which levitates out of what it prosaically
does and around which the actions of its directors, managers and
employees can coalesce.90 Elizabeth Pollman also describes how
notions of corporate purpose have proliferated over time untethered to
legal expression through the corporate charter as corporations found
novel ways of communicating with stakeholders and shareholders about
their values, purposes, and missions’.91
Mission-Purpose Statements are utilised in a number of ways. Jill
Fisch and Steven Solomon recognise that a cynical perspective would
characterize them as virtue-signalling, designed either as marketing
tools or to reduce the firm’s political exposure or vulnerability to
regulation’. 92 They describe them as something akin to a corporate
New Year’s resolution identifying an area in which the corporation
hopes to do betterand unless they are legally enforceable, they opine
that the commitment, like a New Year’s resolution, is easily made, but
also easily broken’.93 However, Mission Purpose Statements may be
used in a positive way to create a connection with customers, suppliers
and the general public. They may also be used to enable stakeholders
to select companies with which they wish to be associated and to
navigate the terms of that association through contract or regulation’.94
To be effective, Fisch and Solomon claim that they need to be clearly
articulated and enforceable. 95 Holger too advocates for purpose
statements which are authentic, offer measurable added value for the
Corporate Culture
(n 82) 8.
UK Code
(n 81) 4.
89 David Kershaw and Edmund-Philipp Schuster,
The Purposive Transformation of Company
(Society and Economy Working Papers 4/2019, LSE Legal Studies, 31 March 2019) 5
90 Ibid 8.
91 Elizabeth Pollman, The History and Revival of the Corporate Purpose Clause (2021) 99
Texas Law Review
1423, 1447.
92 Jill Fisch and Steven Solomon, ‘Should Corporations Have a Purpose? (2021) 99
Texas Law
1309, 1338.
93 Ibid.
94 Ibid 104.
95 Ibid 135-136.
52 Bond Law Review (2022)
company and [are] seriously implemented’.96 However, he adds to this
the requirement that a purpose should make a meaningful contribution
to an unmet social need97 which introduces a normative dimension to
the concept. As a management tool, Bain & Company identify the role
of the Mission Purpose Statement in guiding management’s thinking on
strategic issues, helping to benchmark performance and providing
common goals to inspire employees to work more productively. 98
Perhaps one of the most important roles of purpose statements is that
identified by the
G30 Banking Conduct and Culture Report
suggests that they will also be used to guide employees navigate the
most challenging areas of behaviour the grey zones in which
adherence to conduct and values principles is a matter of judgment and
not of clear-cut legal requirements.99Depending on the values of course,
this should lead to more ethical decision-making. In this context too, it
is essential that the purpose and values be clear and understandable.
Kershaw and Schuster sum it up well when they state that the Mission
Purpose Statement must be both precise and instructive enough to be
meaningful and to connect to everyday business activity and decision-
making, but also sufficiently abstract and aspirational enough to
The idea of a purpose which is measurable is important. The task of
assessing and monitoring culture and adherence to purpose is assigned
by the Code to the board. The Code states that if the board is not
satisfied that policy, practices or behaviour throughout the business are
aligned with the company’s purpose, values and strategy, it should
demand corrective action from management and report in the annual
report the board’s activities and any action taken.101 An analysis of the
annual reports of FTSE 350 companies revealed that while 82% clearly
articulate the reason for their existence beyond profit (up from 50% the
previous year), in a large number of the companies, the purpose reads
like an extended mission statement drafted to tick the section 172 box
of ‘wider purpose’, but lacking a convincing articulation of what
purpose means for how the business is run and makes decisions,
96 Fleischer (n 11) 8, citing Annette Bruce and Christoph Jeromin,
Corporate Purpose - das
Erfolgskonzept der Zukunft
(Springer Gabler Wiesbaden, 2020) 14 et seq.
97 Ibid.
98 Mission and Vision Statements’,
Bain & Company
(Web Page, 2 April 2018)
Banking Conduct and Culture: A Permanent Mindset Change
(G30 Banking Conduct and
Culture Report, G30 Steering Committee and Working Group on Banking Conduct and
Culture, November 2018)
compressed.pdf>. See also R. Duane Ireland and Michael Hirc, Mission Statements:
Importance, Challenge, and Recommendations for Development (1992) 35
100 Kershaw and Schuster (n 89) 490.
UK Code
(n 81) 4.
Vol 34(2) Purpose, Values and Governance in Big Tech Companies 53
offering little insight on measuring success’. 102 Only 6% of the
companies measured progress against their corporate purpose.
Turning now to the BT companies, the Mission Statements of each
is set out in Table 2.
Table 2
Mission Statements for BT Companies
Mission Statement
to offer our customers the lowest possible prices, the best
available selection, and the utmost convenience.
to give people the power to build community and bring the
world closer together
to bring the best user experience to its customers through
its innovative computer hardware, computer software, and
to organize the world's information and make it universally
accessible and useful
to empower every person and every organization on the
planet to achieve more
While all five statements express a commendable commitment to
external stakeholders, all but the Apple and the Amazon103 statements
seem more like fuzzy marketing slogans than governance tools. They
resonate with the aforementioned description by Fisch and Solomon of
a New Year's resolution. They do not provide much insight into the
companies’ values and they are not obviously measurable. It is hard to
imagine for example how the Alphabet Statement could be actualised
and embedded in its corporate strategies, policies, standards and in its
board processes. None of these statements would provide sufficiently
clear guidance to employees or managers dealing with complex
decisions. The issue of lack of enforceability does not even arise given
the amorphous nature of the statements. This finding is not unexpected
as research suggests that mission statements often contain platitudes
and where goals are stated, they are rarely measurable.104
102 Grant Thornton,
Corporate Governance Review 2020
(Report, 2020) 6
103 Amazon’s vision statement “to be the earth's most customer-centric company, the earth’s best
employer and earth’s safest place to work” could be said to fall into this fuzzy marketing
slogan category.
104 Lance Leuthesser and Chi ranjeev Kohli, ‘Corporate Identity: The Role of Mission Statements
(1997) 40
Business Horizons
54 Bond Law Review (2022)
IV Corporate Governance Proposals for BT Companies and
It is clear that directors should play a key role in establishing purpose,
exerting cultural leadership and embedding values. It is also the case
that they may choose to view their roles as maximising shareholder
value in a narrow sense or in respecting the interests of a wider group
of stakeholders. In the case of BT companies as we have seen, the public
statements on the role of the boards in the Corporate Governance
Guidelines do not clearly articulate a clear or enforceable commitment
to stakeholders. Nor do the Mission Purpose Statements provide further
illumination or provide insight into management’s thinking on its
purpose or values. Is more needed?
Before considering three specific policy ideas, we might first
consider whether BT companies should be treated differently in respect
of their governance structures. The large online platforms have
variously been described as digital gatekeepers, public utilities and even
regulators. It is submitted that they also share a number of common
features with banks and other credit institutions which themselves are
heavily regulated and which might justify additional regulation. Both
play a very significant role in our economies. This has led to legislative
intervention in the case of the banking sector with the stated aim of
securing financial stability, economic growth, and customer protection.
A distinctive feature of retail banks is that their debtors include a
significant group of dispersed and uninformed small depositors. One
might also compare the users of online platforms to deposit holders both
in their obvious dependence and in the information asymmetries which
exist. Retail banks are considered to be systemically important. The key
factors contributing to the classification of systemic importance are size
and interconnectedness followed by concentration risk and leverage.105
This leads to systemic risk which is defined as the potential for a threat
or hazard to propagate disruptions or losses to multiple nested or
otherwise connected parts of a complex system’.106 A number of the BT
companies might also be considered now to be systemically important
institutions in the sense that they are so deeply ingrained in the economy
that their failure would be disastrous to it. Having identified the bad
incentives and moral hazards recognised in banking law which are
created when essential intermediating entities are allowed to compete
Guidance to Assess the Systemic Importance of Financial Institutions, Markets and
Initial Considerations - Background Paper
(Report to the G-20 Finance Ministers
and Central Bank Governors, International Monetary Fund and Bank for International
Settlements and the Financial Stability Board, 28 October 2009) 5, <
106 Sebastian Poledna, ‘Systemic Risk Emerging from Interconnections: The Case of Financial
Systems’ in Hynes, W, M Lees and J Müller (eds),
Systemic Thinking for Policy Making -
The Potential of Systems Analysis for Addressing Global Policy Challenges in the 21st
(OECD, 2020) 123.
Vol 34(2) Purpose, Values and Governance in Big Tech Companies 55
with the companies that depend on them, Lina Khan, the legal scholar
and current chair of the U.S. Federal Trade Commission complained
that similar to banking entities:
Amazon - along with a few other dominant platforms - now play a crucial
role in intermediating swaths of economic activity. Amazon itself
effectively controls the infrastructure of the internet economy.107
Focusing on the role of technology in the financial services sector, the
potential systemic risk of BT companies becomes more obvious.
Although at present, financial services represent a relatively small part
of the overall activities of BT companies, they could quickly become
systemically important or too big to fail in this context.108 Dirk
Zetzsche et al noted that as financial technology (FinTech) and
market infrastructure have grown in size, scope, and influence, the
consequences of their failures have increased commensurately and
they have warned of our exposure to an dependence upon massive,
unseen, and largely unregulated financial technology platforms’. 109
Agustín Carstens, General Manager of the Bank for International
Settlements too has suggested that the growth of BT companies in
finance is rapidly changing markets and poses challenges from the
perspective of the public policy objectives of: efficiency and fair
competition; financial stability; market integrity; and consumer
protection.110 Experts have called for a new policy approach which
accommodates the unique features of big techs—such as their vast
scale, ample customer base, and access to large amounts of dataand
captures the risks from the significant interconnection among different
entities within a big tech group and the broader financial system’.111
This is clearly a growing concern for public policy makers. The EU’s
Internal Market Commissioner, Thierry Breton, in an address to the
European Parliament in 2020, referred to the role and the systemic
character of certain platforms arguing that they often behave as if they
were ‘too big to care about legitimate concerns about their roles’.112
107 L. Khan, Amazon's Antitrust Paradox(2016) 126
Yale Law Journal
108 Juan Carlos Crisanto, Johannes Ehrentraudsee and Marcos Fabian,
Big Techs in Finance:
Regulatory Approaches and Policy Options
(Financial Stability Institute Briefs No 12, Bank
for International Settlements, 16 March 2021) <>. See
also Carl Öhman and Nikita Aggarwal, ‘What If Facebook Goes Down? Ethical and Legal
Considerations for the Demise of Big Tech’ (2020) 9
Internet Policy Review
109 Dirk Zetzsche et al,
Digital Finance Platforms: Toward a New Regulatory Paradigm
Paper Series No. 58/2020, European Banking Institute, 3 March 2020) 5,
110 Agustín Carstens, Public Policy for Big Techs in Finance (Speech, Asia School of Business,
Conversations on Central Banking, Finance as Information, 21 January 2021)
111 Juan Carlos Crisanto and Johannes Ehrentraudsee, The Big Tech Risk In Finance’,
International Monetary Fund
(online, May 2021)
112 See also Öhman & Nikita (n 108).
56 Bond Law Review (2022)
There have been calls to consider bringing those BT companies
which can be viewed as digital public utilitiesinto democratic public
ownership. 113 This seems unlikely to happen as it would involve
overriding the property rights of shareholders with a consequential
significant negative effect on global markets. There is also the risk that
it could lead to substantial adverse effects on political and economic
freedoms in the case of those companies in the media sector.114 It could
also prove to be ineffective if it led to the off-shoring of such enterprises
to less regulated jurisdictions. Another option would be to regulate the
acquisition of ownership interests in BT companies as is done in the
financial services or broadcasting sectors.115 This would involve an
examination of the suitability of controlling shareholders. 116 It would
require an agreement on specified and clear criteria to be applied by
competent authorities in the assessment process. In the financial
services area for example, the criteria applied are strictly of a prudential
nature but this would not of course address the issue at hand in the case
of BT companies. A related but less draconian proposal discussed below
focuses on the suitability not of the owners but of those charged with
operating these companies.
Suitability R equirem ents
The first possible policy proposal thus to explore, drawing upon the
banking analogy, is the introduction of suitability requirements for
directors and senior managers. It might be considered that more
appropriate corporate purposes would be adopted by directors and more
appropriate value systems embedded within their organisations if
directors of BT companies were subject to the type of suitability
requirements that are currently imposed on directors and senior
managers in European banks. Rana Foroohar in
Don’t Be Evil
the lack of diversity, the existence of toxic cultures and the public
relations blunders in many BT companies attributing these in part to a
‘solutions-minded mentalitywhich leads to a kind of tunnel vision and
113 Thomas Hanna, Mathew Lawrence and Nils Peters, ‘A Common Platform: Reimagining Data
and Platforms’,
Common Wealth
(online, 2 December 2020) <https://www.common->.
114 Simeon Djankov et al,
Who Owns the Media?
(Harvard Institute of Economic Research Paper
No. 1919, Harvard, 19 April 2001) <>.
115 See, eg, Joint Guidelines on the Prudential Assessment of Acquisitions and Increases of
Qualifying Holdings in the Banking, Insurance and Securities Sectors’,
(Web Page, December 2016) <https://esas-joint->. The issue of media
ownership Johanna Dunaway “Media Ownership and Story Tone in Campaign News” 41
American Politics Research 24 (2013).
116 Blanaid Clarke, Board Governance in Big Tech Companies (Discussion Paper and
Presentation, University of Minnesota, Works-In-Progress (FWIP) Lecture Series, 8 October
2020). See also Editorial Board, Musk, Twitter and the Need to Vet New Media Owners’,
Financial Times
(online, 28 April 2022) <
Vol 34(2) Purpose, Values and Governance in Big Tech Companies 57
cognitive blindness’.117 In the wake of the Global Financial Crisis,
directors of credit institutions across the globe were blamed for their
poor risk management118 and the same criticism might be levelled at
many of the BT companies in the sense of failing to appreciate or
manage the risks associated with their decision-making as set out in Part
I above. For example, in the aftermath of the 2016 U.S. presidential
election, Mark Zuckerberg described the idea that fake news on
Facebook influenced the election in any way as a pretty crazy
idea.119 The Chairman of the Digital, Culture, Media and Sport
Commons Committee’s investigation into fake news in the U.K., which
found that Facebook deliberately broke UK competition and privacy
laws, criticised Zuckerberg on the basis he ‘continually fails to show
the levels of leadership and personal responsibility that should be
expected from someone who sits at the top of one of the world’s biggest
companies’.120 One of the Committees recommendations was that a
compulsory Code of Ethics should be established and overseen by an
independent regulator with statutory powers to monitor relevant
technology companies.121
The EU response to poor management in the banks was to introduce
a new statutory supervisory framework which included the imposition
of corporate governance provisions in banks relating to the role and
composition of the board, board diversity and risk management.122 As
117 Rana Foroohar,
Don’t Be Evil
(2019, NY, Currency) 41.
118 Grant Kirkpatrick, ‘The Corporate Governance Lessons from the Financial Crisis (2009)
OECD Journal: Financial Market Trends
61; Lord Adair Turner,
The Turner Review:
A Regulatory Response to the Global Banking Crisis
(FSA, 2009); Jacques de Larosière et al,
The High Level Group on Financial Supervision in the EU
(EU Commission 2009).
119 Interview with Mark Zuckerberg (David Kirkpatrick, Techonomy Conference, 17 November
2016) <
120 Damian Collins, as reported in Facebook Censured by House of Commons Digital
Irish Times
(online, 18 February 2019)
Disinformation and 'Fake News': Final Report
(Report, UK Parliamentary Committee on
Culture, Media and Sport, 18 February 2019)
122 See
Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on
Access to the Activity of Credit Institutions and the Prudential Supervision of Credit
Institutions and Investment Firms, Amending Directive 2002/87/EC and Repealing Directives
2006/48/EC and 20 06/49/EC
[2013] OJ L 176 E/338 (“
”). Cf
Directive (EU) 2019/878
of the European Parliament and of the Council of 20 May 2019 Amending Directive
2013/36/EU as
Aegards Exempted Entities, Financial Holding Companies, Mixed Financial
Holding Companies, Remuneration, Supervisory Measures and Powers and Capital
Conservation Measures
[2019] OJ L 150 E/253. See also
Regulation (EU) No 575/2013 of the
European Parliament and of the Council of 26 June 2013 on Prudential Requirements for
Credit Institutions and Investment Firms and Amending Regulation (EU) No 648/2012
OJ L 176 E/1 (“
”). Cf
Regulation (EU) 2019/876 of the European Parliament and of the
Council of 20 May 2019 Amending Regulation (EU) No 575/2013 as Regards the Leverage
Ratio, the Net Stable Funding Ratio, Requirements for Own Funds and Eligible Liabilities,
Counterparty Credit Risk, Market Risk, Exposures to Central Counterparties, Exposures to
58 Bond Law Review (2022)
a collective, the board is now required to possess adequate collective
knowledge, skills and experience to be able to understand the
institution's activities, including the main risks’.123 Individual directors
must at all times be of sufficiently good repute and possess sufficient
knowledge, skills and experience to perform their duties’. 124
Furthermore, they mustact with honesty, integrity and independence
of mind to effectively assess and challenge the decisions of the senior
management where necessary and to effectively oversee and monitor
management decision-making’.125 Suitability Guidelines published by
two EU supervisory authorities, the European Banking Authority and
the European Securities and Markets Authority, provide further
granularity setting out the process, criteria and minimum requirements
regarding the determination of a director’s suitability.126 It is worth
emphasising too that different supervisory arrangements are imposed
on banks classified as significant institutions 127 under the framework
including more onerous governance arrangements. For example
significant institutions must have Risk Committees comprised of non-
executive directors with appropriate knowledge, skills and expertise to
fully understand and monitor risk strategies and appetite.128 Banks are
prohibiting from permitting individuals to act as directors unless
satisfied that they meet these criteria and have agreed to comply with
the relevant Suitability Standards set by the supervisory authorities and
unless the supervisory authorities have given their approval to their
appointment. In a recent Consultation Paper, the EU Commission has
explored the idea of extending the assessment of a director’s
competence to include their ability to define and articulate their
institutions desired values.129
If suitability standards were applied to BT companies, the requisite
characteristics and skills would have to be agreed and an interesting
question would be whether they should differ in any respects from those
currently applying to bank appointments. Could one, for example,
accept that a director of a BT company should meet the same standard
Collective Investment Undertakings, Large Exposures, Reporting and Disclosure
Requirements, and Regulation (EU) No 648/2012
[2019] OJ L 150 E/1.
(n 122) art 91(7).
124 Ibid art 91(1).
125 Ibid art 91(8).
126 Joint ESMA and EBA Guidelines on the Assessment of Suitability of Members of the
Management Body and Key Function Holders’,
(Web Page, 2017)
127 Article 76(3) of CRD IV refers to “institutions that are significant in terms of their size,
internal organisation and the nature, scope and complexity of their activities”. Institutions
considered “significant institutions” under the SSM Regulation and the SSM Framework
Regulation would fall within this definition.
(n 122) art 76(3).
Implementing the Final Basel III Reforms in The EU
(Public Consultation Document,
European Commission, 2019).
Vol 34(2) Purpose, Values and Governance in Big Tech Companies 59
of competence but need not have to meet as high a standard of integrity
and honesty? In light of the preceding discussion of the role of such
companies in our society, surely it would be hard to make such an
argument. What of existing directors? Would they all pass such a test?
Another question would be who would undertake this assessment and
enforce the requirements? Researchers in the Brooking Institute arguing
that new technologies require specialized oversight have called for a
purpose-built federal Digital Platform Agency to establish public
interest expectations that promote fair market practices while being
agile enough to deal with the rapid pace of digital technology’.130 The
EU has already demonstrated leadership in the regulation of this sector
in its General Data Protection Regulation. 131 Although the BT
companies are headquartered in the U.S., they have subsidiaries across
the globe and all five have their European headquarters in Ireland. In
2022, the Digital Services Act (DSA) and the Digital Markets Act
(DMA)132 were approved leading to the EU being described as the
most assertive regulator of BT companies and negative comparisons
being drawn with the US.133 The DSA will impose obligations on all
online intermediaries providing services in the EU with very large
digital platforms and services being required to analyse the systemic
risks they create and to carry out risk reduction analysis. The European
Commission will have exclusive power to supervise very large online
platforms and very large online search engines. Responding to the War
in Ukraine and the manipulation of online information, a new article
has been added to the proposed text introducing a crisis response
mechanism. The European Council stated that in terms of ambition,
the nature of the actors regulated and the innovative aspect of the
supervision involved, the DSA would be a world first in the field of
digital regulation.134 The DMA will introduce clear rules for large
130 Tom Wheeler, Phil Verveer, and Gene Kimmelman, ‘The Need for Regulation of Big Tech
Beyond Antitrust’,
(online, 23 September 2020)
Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016
on the Protection of Natural Persons with Regard to the Processing of Personal Data and on
the Free Movement of Such Data, and Repealing Directive 95/46/EC
(General Data Protection
[2016] OJ L 119 E/1.
Proposal for a Regulation of the European Parliament and of the Council on a Single Market
For Digital Services (Digital Services Act) and Amending Directive 2000/31/EC
Commission, COM/2020/825 final, 15 December 2020) was approved by Parliament in July
2022 and Council in October 2022 and is expected to apply in early 2024; Regulation (EU)
2022/1925 on contestable and fair markets in the digital sector and amending Directives (EU)
2019/1937 and (EU) 2020/182 8 (Digital Markets Act) will enter into force in November 2022. .
133 Adam Satariano, E.U. Takes Aim at Big Tech’s Power with Landmark Digital Act’,
York Times
(online, 24 March 2022) <
134 Council of the EU, Digital Services Act: Council and European Parliament Provisional
Agreement for Making the Internet a Safer Space for European Citizens (Press Release, 23
April 2022) <
60 Bond Law Review (2022)
online platforms who act as a ‘gatekeeper’ for a large number of users
to ensure they do not abuse their positions. This will prevent them for
example giving preferential treatment to their own products or services
or reusing private data collected during one service for the purposes of
another service. The European Commission will be the sole enforcer of
the DMA and the enforcement mechanisms will include fines,
directions to remedy serious and even temporary suspension of service.
It is worthwhile exploring whether this package of measures could
provide an appropriate form to introduce suitability measures for the
European subsidiaries of the very large online platforms.
Public Benefit Purpose
A second possibility is the introduction of a public benefit purpose on a
voluntary or mandatory basis. Vasudev argues that the notion of
shareholder primacy is incompatible with the public interest in
corporations and argues for explicit statutory recognition of the
stakeholder principle.135 Different versions of public benefit companies
exist in different jurisdictions.136 In the U.S., a number of public benefit
corporations already exist as well as certified B corporations (B. corps)
which pursue a general public benefit. The latter term is defined in the
U.S. model benefit corporation legislation137 as a material positive
impact on society and the environment, taken as a whole, assessed
against a third-party standard.138 The certification process provides
clear evidence that the companies meet the highest standards of verified
social and environmental performance, public transparency, and legal
accountability to balance profit and purpose. B. corps include Patagonia
Works, Ben & Jerry’s, Danone and Australian Ethical Investment. Over
4,000 of these companies in more than 70 countries have built this
benefit into their legal structures through their articles of incorporation
or charters. For example B. corps in the U.K. in addition to confirming
their section 172 obligations in their governing documents state that
shareholder value is not the supreme consideration but is one factor
amongst the many stakeholder interests which board members need to
take into account when running the business.139 This certification
model has been attributed with encouraging a statutory movement to
135 P.M. Vasudev,
Beyond Shareholder Value: A Framework for Stakeholder Governance
(Elgar, 2021).
136 See Fleischer (n 11) Part III.
137 Benefit Corporation,
The Need and Rationale for the Benefit Corporation: Why it is a Legal
Form that Best Addresses the Needs of Social Entrepreneurs, Investors and Ultimately, the
(White Paper, Benefit Corporation, 18 January 2013) appendix A.
A Legislative Guide to Benefit Corporations
(Report, Patagonia Inc, Vermont Law School
and the Yale Environmental Law Association, 2018) 2
4e8fe94bd0c8.pdf> (‘
Legislative Guide
139 ‘The Legal Requirement for Certified B Corporations’,
Certified B Corporation
(Web Page)
Vol 34(2) Purpose, Values and Governance in Big Tech Companies 61
introduce benefit corporation legislation in 39 U.S. states including
Delaware.140 In Delaware, such a benefit corporation must identify a
specific public benefit in its charter. In other states that have adopted
the model benefit corporation statute, the benefit corporation is required
to pursue a broader general public benefit to society, but may also
choose to identify a specific public benefit to be included in its charter.
This provides directors with greater legal protection to pursue a
business model that places social and environmental values on equal
footing with profits’. 141 Benefit corporations other than those
incorporated in Delaware must then publish an annual benefit report
evaluating their performance with respect to the public benefit
benchmarked against an independent third party standard. 142 Some
states, not including Delaware, also require an independent benefit
director to be appointed to prepare the compliance portions of the
annual benefit report and to evaluate whether they have achieved its
objectives to pursue a public benefit.143 Fisch and Solomon argue that
the use of benefit corporations still preserves the shareholder primacy
norm as shareholders retain the ultimate power and control over the
company and the implementation of its purpose.144 They argue that
benefit corporations should be required to specifically designate a
formal purpose which is capable of assessment and implementation.
This possibility could be considered for BT companies. The precise
nature of such a mandatory public benefit would need to be explored
but would certainly involve consideration of the nature of the public
interest in such companies as discussed below.
Apple shareholders were asked to support a resolution at the AGM
in March 2022, opposed by the Board, that Apple would become a
social purpose corporation and adopt in its Articles of Incorporation
specific social purposes such as:
(A) benefitting (1) the corporation’s employees, suppliers, customers, and
creditors; (2) the community and society; and (3) the environment and (B)
exercising reasonable care to ensure that the Company’s operations do not
impose social and environmental costs that materially contribute to the
degradation or destruction of important social and environmental systems.
The existing statement sought to be replaced was a very typical
boilerplate statement that The purpose of this corporation is to engage
in any lawful act or activity for which a corporation may be organized
under the General Corporation Law of California. This was described
140 Certified B Corporation,
Board Playbook:
The Case and Process for Adopting Benefit
Governance as a Requirement for B Corp Certification
, 10
Legislative Guide
(n 138) 2.
142 Ibid 3.
143 Ibid 4.
144 Fisch and Solomon (n 92) 126.
62 Bond Law Review (2022)
as ‘uninspiring’ in the resolution’s supporting statement which
reminded shareholders that Apple’s CEO, Tim Cook was a signatory of
the aforementioned BRT Statement. It argued that ‘rechartering around
deeper social purposes would allow Apple to align its actions around
common goals and to motivate shareholders, employees, and other
stakeholders through a mission that is more inspiring than profit
maximization. In a nod to the cynical use of purpose statements
referred to above, the statement concluded by stating clearly:
Those social purposes would not be seen as public relations statements that
can be changed according to the latest fad. Our social purposes will be our
North Star, guiding and engaging stakeholders on a path to a better future.
Unfortunately, not everyone shared this viewpoint and the resolution
was defeated with only 297 million shares in favour but a significant
9.29 billion shares against.145 This suggests the task of encouraging
shareholders in BT companies to voluntarily accept a significant change
in the purpose of their companies would be a herculean one.
A related and less intrusive proposition would be the adoption in BT
companies of Edman’s proposed advisory say-on-purpose vote for
investors.146 This idea is similar to the now familiar say-on-pay vote
and would ensure that investors approve the corporate purpose and
agree to any conflicting objectives in its pursuit. He proposes that the
vote could constitute a forward-looking policy vote on the purpose
statement itself and a backward-looking implementation vote on
whether it was put into practice. Fleischer suggests that to allow
shareholders a meaningful vote, a more meaningful purpose report
would be needed integrating mandatory purpose reporting into non-
financial reporting pursuant to the proposed Corporate Sustainability
Reporting Directive147 and its national implementing laws.148 Given the
unclear purpose clauses which we have seen in BT companies, it is
apparent that this alone would not enable shareholders to make an
informed decision and some further reporting would indeed be required
in line with Fleischer’s proposal. A further problem in requiring a say-
on-purpose vote in the context of BT companies is that the votes would
need to receive the support of shareholders and/or founders. Reliance
on the former, as in the case of any listed company, opens up the thorny
debate as to the short-termist preference of investors. In technology
145 Apple Inc,
FORM 8-K Current Report
(Report filed with the United States Securities and
Exchange Commission, 4 March 2022) <
146 Alex Edmans,
Grow the Pie: How Great Companies Deliver Both Purpose and Profit
(Cambridge University Press, 2020) 206.
Proposal for a Directive of the European Parliament and of the Council Amending Directive
2013/34/EU, Directive 2004/109/EC, Directive 2006/43/EC and Regulation (EU) No
537/2014, as Regards Corporate Sustainability Reporting
(European Commission,
COM/2021/189 final, 22 April 2021).
148 Fleischer (n 11) 22.
Vol 34(2) Purpose, Values and Governance in Big Tech Companies 63
companies, founders often retain significant controlling interests in
their companies. In Meta and Google, the founders retain significant
control over the board and the voting rights through the use of dual class
stock which is said to insulate them against market forces and short-
termism and allow them pursue their own corporate visions. 149 This
gives them significantly more influence over company decisions than
other shareholders and may aggravate agency costs.150 For example,
Mark Zuckerberg through his dual class structure controls 57.7% of
Meta’s voting shares.151 Unsuccessful shareholder proposals at the
AGM in 2021 included, for the eighth time since the company went
public, a proposal to eliminate the company’s dual class structure and a
proposal to separate the position of Chair and CEO. In advance of the
2022 AGM, it was also reported that Meta was unsuccessful in its
efforts to block certain resolutions being put to shareholders including
one which would require Meta to assess the human rights impacts of its
targeted advertising.152 Even if founders are not in control, Kershaw
and Schuster argue that a zone of insulation can exist around a CEO
considered by investors to be vital to the success of the company
allowing them to resist investor pressure over the medium term.153 This
deference is likely to be exacerbated in BT companies where the
founders are the technological innovators and entrepreneurs credited
with superhuman vision and competence that merit deference from
lesser mortals in what Jerry Davis describes as the mythology of the
149 Zohar Goshen and Assaf Hamdani, ‘Corporate Control and Idiosyncratic Vision (2016) 125
Yale Law Journal
560; David J. Berger, Steven Davidoff Solomon and Aaron J. Benjamin
Tenure Voting and the U.S. Public Company (2017) 72
Business Lawyer
295; Dorothy
Shapiro Lund, ‘Nonvoting Shares and Efficient Corporate Governance (2019) 71
Law Review
687; Vittoria Battocletti, Luca Enriques and Allesandro Romano,
Dual Class
Shares in the Age of Common Ownership
(Law Working Paper No. 628, European Corporate
Governance Institute, April 2022) <>.
150 Martijn Cremers, Beni Lauterbach and Anete Pajuste,
The Life-Cycle of Dual Class Firm
(Finance Working Paper No. 550/2018, European Corporate Governance Institute,
30 June 2022) <>.
151 Facebook Inc,
Notice of Annual Meeting & Proxy Statement
152 Jan Rydzak, ‘Meta Shareholders Push for Better Governance of Human Rights Risks Ahead
of May AGM’,
Ranking Digital Rights
(online, 11 April 2022)
153 Ibid 19.
154 Jerry Davis, ‘Ayn Rand-Inspired ‘Myth of the Founder’ Puts Tremendous Power in Hands of
Big Tech CEOs Like Zuckerberg – Posing Real Risks to Democracy’,
The Conversation
(online, 30 March 2021) <
64 Bond Law Review (2022)
Public Interest Directors
A final possibility which might be considered and which combines
aspects of the previous two ideas is ensuring that the directors serve the
public interest. This might be done either through the appointment of
public interest directors or the imposition of mandatory public interest
duties on all directors. Both steps were taken in Ireland in regulating
banks following the 2008 Banking Crisis in Ireland. Initially, the Irish
Government appointed two ‘public interest directors’ to each of the six
banks for which it had provided a blanket deposit guarantee.155 In an
effort to select individuals with a public interest perspective’,156 the
of the twelve individuals had extensive experience at a senior
level in public service, either as elected representatives or civil servants.
These directors were expected to bring a civic mindedness and a sense
of what is in the public interest.157 It was believed by the Minister for
Finance who appointed them that their sense of public interestwould
inform how they would interpret the banks’ best interests and how they
should perform their duties on their boards.158
The Irish Government subsequently introduced the Credit
Institutions (Stabilisation) Act 2010 section 48(1) of which imposed a
duty on all bank directors in the performance of their functions …to
have regard to a broad range of matters including: the availability of
credit in the economy; the State’s interest in respect of the Bank
Guarantee; the protection of taxpayers’ interests; the restoration of
confidence in the banking sector; Government support measures in the
banking sector; and the alignment of the activities of the banks and the
duties and responsibilities of their officers and employees with the
public interest and the other purposes of that Act. In effect thus, by
imbuing all of the banks’ directors with responsibilities in relation to
the specified public interest issues, all of them were made public
interest directors. A unique feature of the section 48(1) duty is that it
was qualified by section 48(2)(b) which provided that the duty takes
priority over any other duty of the directors to the extent of any
inconsistency. This sought to provide a statutory response to the
question which frequently arises in the context of the stakeholderism
debate how to balance competing interests. Section 48 was never
tested before the courts and the legislation ceased to have effect in 2014.
However, the existence of such a statutory duty indicated the
155 Blanaid Clarke and Gail Henderson, Directors as Guardians of the Public Interest: Lessons
from the Irish Banking Crisis (2016) 16
Journal of Corporate Law Studies
156 Credit Institutions (Financial Support) Bill 2008: Committee Stage (Resumed),
Dáil Éireann
Vol 662, No 2, 1 October 2008.
157 See Written Answers Public Interest Directors (16 December 2010, Vol 725, No 3)
Éireann Debate
158 Ibid.
Vol 34(2) Purpose, Values and Governance in Big Tech Companies 65
willingness of the Irish legislature to impose a potentially overriding
duty on directors to act in the public interest.
While we should not underestimate the difficulty of agreeing a
public interest purpose for companies outside the financial services
sector, it should be possible to mandate public interest objectives at least
for those BT firms which involve the greatest risks such as the large
online platforms. Where designated public interest directors were being
appointed, the nature of their duties, and in particular whether their
duties should differ from those of the other directors, would need to be
considered. A decision would need to be taken at the design stage for
either option as to the extent to which the public interest should be
substituted for corporate interests or merely used to restore greater
balance in the face of corporate interests where a conflict existed.
Would directors be required to prioritise their duty to act in the public
interest as section 48 appeared to do or merely to consider it in the sense
section 172 of the UK Companies Act 2006 sets out matters to which
the board must have regard? Where one or more designated public
interest directors are to be appointed to the board, another consideration
is whether a small number of directors would be in a strong enough
position to make a real impact on board decisions in BT companies with
the concentrated ownership and control structures discussed above or
whether they would end up as mere token appointments. This would
depend to an extent on the calibre of the individuals and on whether
they were appointed by the Government, an independent third party or
by the company’s nominating committee in the usual way. For
European subsidiaries, it might be the case for example that they could
be appointed at the behest of the European or national supervisors under
the aforementioned Digital Services Act. A decision would also have to
be taken as to whether the public interest directors would be expected
to report to the entity that nominated them. Finally, the appointment of
directors charged with one particular function, whether it be public
interest or diversity or AI ethics, might suggest that this is not an
important issue for all directors. It might in some way be seen to confer
permission on the other directors to abdicate responsibility for public
interest. This would clearly be undesirable. It would be better for all
directors to consider themselves duty bound to act in the interests of the
public so that the public interest was embedded in all decision making
and, in this way, could become part of their companies purpose.
V Conclusion
It is not suggested that the policy measures proposed above would
constitute a total fix but rather that further thought might be given to
determine whether they have a role to play as part of a larger toolbox.
It is clear that a holistic approach will be needed to resolve all the
66 Bond Law Review (2022)
different and complex issues BT raises. It is also the case that not all
technology companies would be treated in an equivalent manner and
small start-ups for example would not be expected to comply with the
same level of governance requirements. However, the BT companies
the subject of this article might all be considered to be significant in a
sense understood in banking regulation and anticipated in the EU
Commissions new rules for digital platforms.
From the perspective of the BT companies, the idea of appointing
public interest directors might be viewed as the most palatable or least
intrusive of the ideas reviewed in this article. It might also be introduced
on a voluntary basis. Zuckerberg promised to review whether Facebook
needed to change anything structurally to make sure the right groups
and voices are at the table - not only when decisions affecting a certain
group are being made, but when other decisions that may set precedents
are being made as well159 and other BT companies might share this
view. The Irish experience suggests that public interest directors can
play a useful role but that there must be a clear understanding as to what
the public interest is. The notion of public interest permeates much of
the discussion about the involvement of technology in a wide range of
public activities, including journalism, civic engagement, education,
and transport and the role it plays in the realization of important public
values and policy objectives associated with these activities’. 160
However, in the same way, that section 48 of the Credit Institutions
(Stabilisation) Act 2010 defined the meaning of public interest in the
context of banking, an agreement as to its meaning in the context of BT
would be needed. In addition, the various components of the public
interest may be in conflict with each other on occasion and absent an
equivalent to section 48(2)(b), the public interest directors would have
to be able to determine how they should be balanced. The final report
following Facebook’s Civil Rights Audit 161 explained how such a
conflict might arise. It criticised inter alia Facebook’s failure to remove
a number of Donald Trump’s voting-related posts on the basis that this
appeared to reflect a statement of values that prioritised protecting free
expression over other stated company values. It concluded:
For a 21st century American corporation, and for Facebook, a social media
company that has so much influence over our daily lives, the lack of clarity
about the relationship between those two values [free expression and non-
discrimination] is devastating. It will require hard balancing, but that kind
of balancing of rights and interests has been part of the American dialogue
159 Mark Zuckerberg (Facebook, 5 June 2020)
160 Natali Helberger, Jo Pierson and Thomas Poell, Governing Online Platforms: From
Contested to Cooperative Responsibility’ (2018) 34
The Information Society
Facebook’s Civil Rights Audit Final Report
(8 July 2020)
Vol 34(2) Purpose, Values and Governance in Big Tech Companies 67
since its founding and there is no reason that Facebook cannot harmonize
those values, if it really wants to do so.162
This statement is important too in its final reminder that many of the
changes sought as to the manner in which BT companies operate and
the purposes we wish them to acknowledge do not need legislative
change. They merely need genuine buy-in and commitment from the
companies themselves and those that control them.
162 Ibid 12.
ResearchGate has not been able to resolve any citations for this publication.
Full-text available
This Article offers a novel theory of corporate control. It does so by shedding new light on corporate-ownership structures and challenging the prevailing model of controlling shareholders as essentially opportunistic actors who seek to reap private benefits at the expense of minority shareholders. Our core claim is that entrepreneurs value corporate control because it allows them to pursue their vision (i.e., any business strategy that the entrepreneur genuinely believes will produce an above-market rate of return) in the manner they see fit. We call the subjective value an entrepreneur attaches to her vision the entrepreneur’s idiosyncratic vision. Our framework identifies a fundamental tradeoff, stemming from asymmetric information and differences of opinion, between the entrepreneur’s pursuit of her idiosyncratic vision and investors’ need for protection against agency costs. Entrepreneurs and investors address this inevitable conflict through different ownership structures, each with different allocations of control and cash-flow rights. Concentrated ownership, therefore, should not be viewed as an unalloyed evil. To the contrary, it creates value for controlling and minority shareholders alike. Our analysis shows that controlling shareholders hold a control block to increase the pie’s size (pursue idiosyncratic vision) rather than to dictate the pie’s distribution (consume private benefits). Importantly, when the entrepreneur’s idiosyncratic vision is ultimately realized, the benefits will be distributed pro rata to all investors. Our framework provides important insights for investor protection and corporate law doctrine and policy. We argue that corporate law for publicly traded firms with controlling shareholders should balance the controller’s need to secure her idiosyncratic vision against the minority’s need for protection. While the existing corporate-law scholarship has focused solely on the protection of minority shareholders, we show that it is equally important to pay heed to the rights of the controlling shareholders.
We examine U.S. dual- and single-class firms from 1980 to 2019 and document their valuation differences over their corporate life cycle. At the IPO, dual-class firms have higher mean valuations than do single-class firms, and some evidence indicates that this premium may emanate from dual-class firm founders’ unique vision and leadership skills. As firms age, the valuation premium of dual-class firms tends to dissipate, possibly because dual-class agency problems increase due to a gradual widening of the wedge (the difference between insider voting and cash flow rights) in the post-IPO years. (JEL G32, G34) Received April 15, 2019; editorial decision: July 2, 2022 editor by Andrew Ellul.
This paper examines an innovative response to the rise of dual-class stock: the use of tenure voting by U.S. public companies. Tenure voting is the award of an additional number of votes to shareholders depending upon the duration of their ownership. Tenure voting has the potential to be a more palatable alternative to high-vote and no-vote shares while also addressing current arguments about long- and short-termism in U.S. markets. This paper outlines the mechanics of tenure voting; discusses policy reasons for and against this voting mechanism; and explores the legalities of the adoption of tenure voting by currently listed U.S. public companies. It is intended as a resource and guide for those U.S. public companies considering this innovative voting mechanism.
What If Facebook Goes Down? Ethical and Legal Considerations for the Demise of Big Tech' (2020) 9
for International Settlements, 16 March 2021) <>. See also Carl Öhman and Nikita Aggarwal, 'What If Facebook Goes Down? Ethical and Legal Considerations for the Demise of Big Tech' (2020) 9 Internet Policy Review 1.
  • Dirk Zetzsche
Dirk Zetzsche et al, Digital Finance Platforms: Toward a New Regulatory Paradigm (Working Paper Series No. 58/2020, European Banking Institute, 3 March 2020) 5, <>.
Public Policy for Big Techs in Finance' (Speech, Asia School of Business, Conversations on Central Banking, Finance as Information
  • Agustín Carstens
Agustín Carstens, 'Public Policy for Big Techs in Finance' (Speech, Asia School of Business, Conversations on Central Banking, Finance as Information, 21 January 2021) <>.
The Big Tech Risk In Finance
  • Carlos Crisanto
  • Johannes Ehrentraudsee
Juan Carlos Crisanto and Johannes Ehrentraudsee, 'The Big Tech Risk In Finance', International Monetary Fund (online, May 2021)
Takes Aim at Big Tech's Power with Landmark Digital Act
  • Adam Satariano
Adam Satariano, 'E.U. Takes Aim at Big Tech's Power with Landmark Digital Act', New York Times (online, 24 March 2022) <>.
Nonvoting Shares and Efficient Corporate Governance' (2019) 71 Stanford Law Review 687; Vittoria Battocletti, Luca Enriques and Allesandro Romano, Dual Class Shares in the Age of Common Ownership (Law Working Paper No. 628, European Corporate Governance Institute
  • Dorothy Shapiro Lund
Dorothy Shapiro Lund, 'Nonvoting Shares and Efficient Corporate Governance' (2019) 71 Stanford Law Review 687; Vittoria Battocletti, Luca Enriques and Allesandro Romano, Dual Class Shares in the Age of Common Ownership (Law Working Paper No. 628, European Corporate Governance Institute, April 2022) <>.
Meta Shareholders Push for Better Governance of Human Rights Risks Ahead of May AGM
  • Jan Rydzak
Jan Rydzak, 'Meta Shareholders Push for Better Governance of Human Rights Risks Ahead of May AGM', Ranking Digital Rights (online, 11