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The application of Rousseau's theory of social contract to corporate governance


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Baron, PD 1995 , 'The application of Rousseau's theory of social contract to corporate governance', Research Master thesis, University of Tasmania.

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Much of the literature in the area of Australian corporate law reveals dissatisfaction with
our current regulatory scheme. Despite extensive (and ongoing) legislative reforms, the
scheme continues to be criticised as costly, complex and largely inefficient in regulating
corporate abuse. The objective of this thesis is to consider a new model of corporate
governance, both internal (that is, between the members and the management of the
corporation) and external (that is, between the corporation and the state). This model is
based upon the theory of contractual rights and obligations proposed by Jean Jacques
Rousseau in The Social Contract. The value of this model is that it recognises and seeks
to reconcile the inherent tension which underlies all associations (be they family, state or
corporation): that of individual self-interest on the one hand and the collective good on the
In this thesis, I shall argue that our ideas of what a corporation is and how it should be
governed have been largely constructed by liberal theory. The corporation and its
regulation, then, are not absolutes, but social and historical constructs which we are free
to reject or modify as we see fit. By examining the ways in which the values and
assumptions of liberalism are made explicit in corporate law; then by comparing the
traditional model of corporate law with that based upon Rousseau's social contract theory,
I shall seek to show that many of the assumptions and values underlying corporate law are
no longer valid. Merely 'patching up' the existing model is insufficient. What is needed
is a complete re-evaluation of the corporation and its place in our society.
The thesis will begin by examining the corporation as a political entity. Rousseau's
political theory will then be contrasted with those of Hobbes and Locke in order to reveal
the different values and assumptions that underlie these theories. I shall then examine the
way in which contemporary company law is based upon the values and assumptions of
liberalism, before examining both the internal and external governance of corporations in
order to identify the problems of regulation and the application of Rousseau's theory to
those problems.

Item Type: Thesis - Research Master
Authors/Creators:Baron, PD
Keywords: Rousseau, Jean-Jacques, 1712-1778, Rousseau, Jean-Jacques, 1712-1778, Corporate governance, Corporate governance, Corporation law
Copyright Holders: The Author
Copyright Information:

Copyright 1995 the Author - The University is continuing to endeavour to trace the copyright
owner(s) and in the meantime this item has been reproduced here in good faith. We
would be pleased to hear from the copyright owner(s).

Additional Information:

Thesis (LL.M.)--University of Tasmania, 1995. Includes bibliographical references

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