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Foster, Nicholas H.D. --- "The Theoretical Background: The Nature of the Actors in Corporate Social Responsibility" [2005] ELECD 195; in Tully, Stephen (ed), "Research Handbook on Corporate Legal Responsibility" (Edward Elgar Publishing, 2005)

Book Title: Research Handbook on Corporate Legal Responsibility

Editor(s): Tully, Stephen

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781843768203

Section: Chapter 1

Section Title: The Theoretical Background: The Nature of the Actors in Corporate Social Responsibility

Author(s): Foster, Nicholas H.D.

Number of pages: 17

Extract:

1 The theoretical background: the nature of
the actors in corporate social responsibility
Nicholas H.D. Foster1



Introduction
The aim of this chapter is to provide a brief overview of the theoretical back-
ground to the corporation (`corporate law theory') and its impact on the study
of corporate social responsibility. Corporate law theory examines such issues
as the definition of the corporation, the nature of, reasons for, and means of, its
existence, and the ways in which it functions. These questions are surprisingly
difficult and controversial. The chapter starts by explaining the key distinction
in corporate law theory and the nature of the two most important phenomena.
It then provides a historical summary. The next section describes and critiques
some influential theories, both old and new. The chapter ends with an applica-
tion of the theoretical background to corporate social responsibility.

Real and legal entities2
The usual first step in a theoretical discussion is the definition of the subject
matter. In other words, we look for the answer to the question: what is a corpo-
ration?
This question has two fundamental flaws. First, it assumes that the word
`corporation' denotes one `thing'. In fact it denotes two, enterprises (a subcat-
egory of real entities) and legal entities. The difference between them
(explained below) is the key distinction in corporate law theory. So let us
change our approach in order to take account of this distinction, and ask two
questions rather than one:

1. What is the enterprise?
2. What is ...