7.1 Introduction

In the past decade, Paul Polman, the then CEO of Unilever, and Emmanuel Faber, the then CEO of Danone, were held up as examples of CEOs who wanted to take account of stakeholders beyond shareholders.Footnote ¹ And in that same decade, Larry Fink, CEO of Blackrock, used his annual “Letter to CEOs” to call for the inclusion of longer-term consequences of a company’s strategy in the board’s deliberations.Footnote ² Likewise, Dutch pension funds, including ABP, PFZW, and PME, started to reduce or abandon their holdings in fossil fuel-related assets.Footnote ³

But by the start of 2019, Polman had been replaced, and by early 2021 Faber was sacked. Likewise, the mandate of Dutch pension fund managers to pursue investments guided by environmental, social, and governance (ESG) criteria was questioned,Footnote ⁴ with the argument that they should prioritize near-term financial results. This last challenge followed a 2022 debate in the US, in which Fink was vigorously attacked by Senators who argued that he had overstepped the boundaries of what was permissible under US rules governing fiduciary duties.Footnote ⁵ In the wake of this attack, Fink stepped back from his earlier statements, while Blackrock, Vanguard, and many other asset managers dropped their support for ESG-oriented shareholder proposals and left initiatives like Climate Action 100+.Footnote ⁶

These cases raise several questions, including: What is the real-world mandate for CEOs seeking to engage with stakeholder and long-term interests? How can a shift in the interpretation of a concept like fiduciary duties silence the CEO of one the largest institutional investors in the world? And who determines the correct interpretation of the scope of such a concept, particularly when the emergence of systemic risks like climate change puts increasing pressure on the role of CEOs of companies and investors to engage with broader notions of risk and opportunities for broader types of audiences (Veldman Reference Veldman2024)? To address these questions, my starting point is the Governing Knowledge Commons (GKC) framework (Frischmann et al. Reference Frischmann, Madison and Strandburg2014), which I connect with the Strategic Action Field (SAF) approach (Fligstein and McAdam Reference Fligstein and McAdam2012). Combining these approaches helps us think about both historical and current corporate governance debates.

7.2 Strategic Action Fields and the GKC Framework

The GKC framework is “an approach (commons) to governing the management and/or production of a particular type of resource (knowledge)” (Frischmann et al. Reference Frischmann, Madison and Strandburg2014, 2) in order to focus on “the institutionalized community governance of the sharing and, in some cases, creation, of a wide range of intellectual and cultural resources” (Frischmann et al. Reference Frischmann, Madison and Strandburg2014, 3). Adopting this framework introduces three specific concerns regarding shared knowledge production in the domain of corporate governance. Firstly, a knowledge commons approach focuses on a description of the production and management of (knowledge) resources, including rules, institutional designs, governance mechanisms, and technological infrastructures (Sanfilippo et al. Reference Sanfilippo, Frischmann and Standburg2018).

Secondly, the GKC framework introduces a series of questions regarding the quality of the processes by which (knowledge) resources are produced and managed, including who has a say in the production of such knowledge. Relevant issues here pertain to the degree to which a relevant community (or communities) is (are) included; the ways in which the goals and objectives of the commons and the relationships among various types of participants and with the general public are taken into account and conceived as legitimate; the selection criteria for decision-makers and the degree to which they are perceived to be legitimate by community members, other decision-makers, and impacted outsiders; the degree to which non-members are able to interact with the commons and the institutionalization of those interactions; and the degree to which impacted groups have a say in the governance of the knowledge commons (Sanfilippo et al. Reference Sanfilippo, Frischmann and Standburg2018).

Thirdly, the GKC framework highlights the outcomes of the content and processes that feed into the production and management of (knowledge) resources. Notably, the GKC framework underscores the relationship between the quality of the production of (knowledge) resources and the conditions that allow for the successful pooling and sharing of intellectual or cultural resources, including the roles of and impact on (non-)community members in relation to the design of those rules; the goals, objectives, and established norms that help facilitate common valuations and types of knowledge creation that help overcome of collective action problems; the provision of benefits to (non-)members, and engagement with externalities (Sanfilippo et al. Reference Sanfilippo, Frischmann and Standburg2018).

In sum, the GKC framework draws attention to the content, quality, and consequences of the production, the institutionalized (community) governance, and the sharing of knowledge. In the domain of corporate governance, the key knowledge that is produced, institutionalized, and shared concerns the rules, institutional designs and mechanisms, and technological infrastructures that enable corporations to be governed. The SAF approach developed by Fligstein and McAdam (Reference Fligstein and McAdam2011, Reference Fligstein and McAdam2012) is a useful way of thinking about how such knowledge is governed. This is because the SAF approach introduces three further questions that help us dig deeper into the attributes of the relevant communities.

The first question is: what are the (diffuse) understandings of the actors about what is going on and what is at stake in the field of corporate governance? In Section 7.3, I provide an account of how different imaginaries of corporate status, architecture, governance, and purpose have been actively created, and in Section 7.4, I explore how these imaginaries provide differing grounds for the formation of the rules of corporate governance, understood in terms of the seven distinct categories identified by Ostrom (Reference Ostrom2005).Footnote ⁷ The second question is: how do actors develop divergent and persistent historical social norms regarding these imaginaries? In my overview of the history of corporate governance, I explore how specific interconnected epistemic communities (Haas Reference Haas, Smelser and Baltes2001), comprising disciplinary specialists, standard setters, and practitioners, actively seek to create, maintain, legitimize, and institutionalize particular social norms that affect the scope for the adoption of ideas of corporate status, architecture, governance, and purpose.

The third and final question is: which interpretive frames do individual and collective actors bring to make sense of what others are doing? As Hirschman and Berman (Reference Hirschman and Berman2014, 783–784) explain: “Epistemic communities are networks of experts who share some set of beliefs. They have more ideological unity than a whole profession, and thus can strategically promote policies consistent with their beliefs.” It follows that we need to identify the “conditions under which epistemic communities are able to exert such influence.” I will develop several examples to show how actors are well aware of both the proactive nature of these processes of knowledge creation and the consequences of such processes on the foregrounding of specific rule-sets in corporate governance.

By engaging with these three questions, I show how the GKC framework may be used to understand the content, conditions, and consequences of processes of creation of knowledge resources, while the SAF framework helps explain the agency of epistemic communities in establishing specific knowledge claims regarding the promotion and institutionalization of specific rule-sets (Fligstein and McAdam Reference Fligstein and McAdam2011, Reference Fligstein and McAdam2012; see also Fligstein 2016). With these two lenses, I demonstrate how historical episodes of active creation and maintenance of notions of corporate status, architecture, governance, and purpose delivered contrasting foundations for the creation of Ostromian rules in the domain of corporate governance.

Settling the question of which rule-sets are dominant is important from the perspective of the relevant epistemic communities, because the adoption of specific rule-sets is linked to a broad set of organizational outcomes, specifically the capacity to decide, control, monitor, and sanction within the corporate domain (Klein et al. Reference Klein, Mahoney, McGahan and Pitelis2019); the recognition of the validity and salience of particular stakeholders and interests (Veldman Reference Veldman, Jessen, Barnow and Popp-Madsen2025); and the ability to overcome commitment problems in relation to the successful pooling of assets and liabilities (Bridoux and Vishwanathan Reference Bridoux and Vishwanathan2020; Aguilera et al. Reference Aguilera, Aragón-Correa, Marano and Tashman2021; Clarke Reference Clarke2021). And beyond organizational outcomes, the examples given in the introduction show how the adoption of specific rule-sets lays out the conditions of possibility for practitioners to engage with “externalities,” which include the overshooting of planetary boundaries, climate change, and growing social inequality (Metcalf and Benn Reference Metcalf and Benn2012; Howard-Grenville et al. Reference Howard-Grenville, Davis and Dyllick2019).

7.3 Imaginaries of Corporate Status, Architecture, Governance, and Purpose

Since the invention of the corporation, but particularly in the last two centuries, there has been a very lively debate about the status, architecture, governance, and purpose of the corporate form. The debate has mobilized many types of actors, including legal, economic, accounting, and management scholars, entrepreneurs, shareholders, judges, lawyers, standard setters, accountants, financial advisors, politicians, journalists, and the broader public (Roy Reference Roy1999; Johnson Reference Johnson2010; Winkler Reference Winkler2019). The widely accepted outcomes of these debates evolved over time.

7.4 Competing Imaginaries, Social Norms, and Rule Configurations

The discussion thus far has drawn attention to two issues relating to the production of knowledge in corporate governance. The first is that two social norms underpinning diverging ideas of corporate status, architecture, governance, and purpose are today vying for dominance (Veldman and Willmott Reference Veldman, Willmott, Meyer, Leixnering and Veldman2022). The second is that it is important to examine the role of active processes of knowledge construction within interconnected epistemic communities where these social norms and the competing imaginaries upon which they are built develop and are propagated.

To relate these issues to the GKC framework, I will explore them further using the Ostromian notion of action situations, where the establishment and interpretation of the content, scope, and operation of specific rules frame the assignment of rights to positions, define structures of authority and responsibility, and govern access to and use of resources (Gindis and Micheler Reference Gindis and Micheler2024). An illustration of how such rules enable and constrain actors to undertake or refrain from undertaking specific actions can be found in the way in which a narrowing of the interpretation of fiduciary duties led Larry Fink to rescind his earlier commitments to ESG and stakeholders. This example elucidates how rules are subject to interpretation and the enforcement of social norms. Before linking this with a broader discussion of social epistemology, I assess how the competing social norms of corporate governance are expressed in Ostrom’s (Reference Ostrom2005) typology of position, boundary, choice, aggregation, information, payoff, and scope rules.

Position rules create positions and roles, such as being a voter or a member of a legislature or a committee (Ostrom Reference Ostrom2005, 193). In Section 7.3, I showed how the currently dominant social norm understands the corporate authority structure as based on a flat architecture, in which a contractual, dyadic, and exclusive relation between individual shareholders and board members provides the basis for the creation of positions. In contrast, the pre-1970s social norm was predicated on the view that corporate architecture was built around corporate organs. On this latter view, positions are created in relation to organs with a collegiate status and responsibility, which provides the basis for a devolved model for the allocation of authority and rights. The dominance of a specific social norm, therefore, informs very different starting points for our understanding of corporate positions, and these directly affect the interpretation of the key constructs operating in the corporate architecture, including the (supervisory) board, the general meeting, management, work councils, and so on (Johnson and Millon Reference Johnson and Millon2005; Segrestin et al. Reference Segrestin, Johnston and Hatchuel2019).

Boundary rules define who is eligible to hold the position of member, the process by which this happens, and the rules for leaving it (Ostrom Reference Ostrom2005, 194). Building on the position rules described above, the pre-1970s social norm established the content and the validity of a member of the corporation as a consequence of membership of a corporate organ. Such a view allowed for the affordance of collegiate rights, claims, and responsibilities to (supervisory) directors and shareholders, and the framing of the role and duties of such members in a devolved authority and rights structure (Greenwood Reference Greenwood2017; Lokin and Veldman Reference Veldman2019). By contrast, the post-1970s social norm uses residual claim arguments to understand membership on a functional and individual basis, and on that basis understands the affordance of rights, claims, and responsibilities to shareholders as direct, rather than mediated by a corporate rights structure.Footnote ⁹ As with the position rules, the two social norms thus deliver very different points of departure for the understanding of the boundary rules that establish the concept and validity of the notion of a member of the corporation (Vasudev Reference Vasudev2012).

Choice rules specify what a participant occupying a position must, must not, or may do at a particular point in a decision process and thereby affect the action sets that are available in specific positions (Ostrom Reference Ostrom2005, 195). An example of the influence of social norms on choice rules is the remarkable shift in monitoring and control by (institutional) shareholders. Direct institutional shareholders’ engagement with boards was not accepted before the 1980s, and it was the shift in social norms that created a significant pressure to provide institutional shareholders with a more active role in corporate governance issues. This is what led to a much more pronounced capacity for institutional shareholders to engage directly with boards (Pye Reference Pye2001; Davis Reference Davis2009).

Aggregation rules concern collective decision-making and dispute resolution (Ostrom 1995, 202). These are particularly important in situations where choice rules assign partial control over the same set of action variables to multiple positions. As noted, different interpretations of position rules inform divergent assumptions regarding the status of various actors, the allocation of rights on a devolved or direct basis, and, relatedly, the role and function of countervailing powers, checks, and balances in a corporate architecture. Divergent social norms affect the interpretation of boundary rules that govern who exactly counts a member and receives legal standing in relevant corporate governance institutions, as well as the interpretation of choice rules that affect expectations regarding what a specific corporate organ or corporate member can or cannot do. Divergent position, boundary, and choice rules in turn lead to divergent views concerning the scope, content, and operation of collective decision-making and dispute resolution. The two social norms are visible in debates regarding the need to consult or engage with different types of stakeholders and resolve or mediate their competing claims (Grandori Reference Grandori2010). The two norms are likewise visible in debates about the capacity of stakeholders other than shareholders to bring claims in specialist corporate governance-oriented courts, like the Dutch Enterprise Chamber (Lokin and Veldman Reference Veldman2019).

This brings us to information rules, which determine the type and level of information available to participants (Ostrom Reference Ostrom2005, 206). The importance of such information rules can be exemplified by looking at the position and operation of works councils. Based on the previously dominant social norm, co-determination structures found their way into corporate governance, particularly in continental Europe (Leixnering et al. Reference Leixnering, Meyer, Doralt, Meyer, Leixnering and Veldman2022). However, while much of the debate on such co-determination structures focuses on nomination rights for supervisory board members, the practical effect of such structures is often linked to the mandatory nature of information, consultation, and negotiation rights afforded to works councils, specifically in the context of changes in ownership structure (Vitols Reference Vitols2004; Van Bekkum et al. Reference Van Bekkum, Hijink, Schouten and Winter2010; Veldman Reference Veldman2019). With this in mind, the place of employees in corporate governance is dependent on position and boundary rules that establish the status of the works council, and on the use of information rules that guarantee their access to specific types of information under specific circumstances. Arguably, the development of a new social norm that affects the position and boundary rules concerning the status of the works council also affects the operation of these information rules.

It goes without saying that payoff rules, which affect the benefits and costs assigned to outcomes given the actions chosen (Ostrom Reference Ostrom2005, 207), will also be affected by shifts in the social norms that affect positions, memberships, choice sets, decision mechanisms, and information access rights. The consequences of a shift to the post-1970s social norm are clearly visible in the expanding use of stock options in executive remuneration over the last four decades, the legalization and subsequent growth of share buybacks, and so on (Lazonick Reference Lazonick2014).

Finally, scope rules determine which outcomes must, must not, or may be affected within a domain (Ostrom Reference Ostrom2005, 208). These outcomes are most clearly connected to ideas of corporate purpose. While the pre-1970s social norm linked corporate governance to the achievement of broad societal and stakeholder goals, the currently dominant social norm focuses managerial consideration exclusively on near-term shareholder results. The interests of a broader set of stakeholders and broader issues like planetary boundaries and climate change have become relegated to the status of “externalities” (Butzbach Reference Butzbach, Meyer, Leixnering and Veldman2022).

Overall, the content of the seven types of rules identified by Ostrom is captured in two diverging rule configurations, which rest on the dominant social norms in the domain of corporate governance. This draws attention to the way in which the (re-)production of knowledge regarding these rules takes place.

7.5 Discussion

To assess the conditions of knowledge production in the domain of corporate governance, it is notable that the contingent basis for notions of social ontology is well-recognized in the history of corporate law and corporate governance (Dewey Reference Dewey1926; Horwitz Reference Horwitz1992). Relatedly, it is well-recognized that “at any particular time, corporate governance contains a number of contradictory pressures and points of conflict” (Aguilera and Jackson Reference Aguilera and Jackson2010, 48), and that the resolution of these debates is linked to significant socio-economic outcomes (Ireland Reference Ireland2005; Freeman 2011; Winkler Reference Winkler2019). The replacement of the social norms underpinning corporate governance in the 1970s was a process of displacement of alternative imaginaries in what Peck (Reference Peck2010) referred to as a “war of ideas” and Davies (Reference Davies2010, 10) called a “self-consciously epistemological and discursive” battle, aimed at subsuming legal expertise within economic expertise.

Both the process and the content of the profound changes in prevailing conceptions of corporate status, architecture, governance, and purpose have affected scholarship in company law, economics, management, and accounting (Bratton Reference Bratton1989; Blair Reference Blair1998; Ghoshal Reference Ghoshal2005; Biondi et al. Reference Biondi, Canziani and Kirat2007; Davies Reference Davies2010; Stout Reference Stout2012). Commenting on the currently dominant norm, Millon (Reference Millon2014, 32–33) observed:

In Section 7.2, I explored how the development, stabilization, and institutionalization of these new knowledge claims was based on the availability of academic, cultural, and financial resources, such as funding and media outlets, and on the formation of academic and practitioner networks comprised of disciplinary specialists, such as accountants, academics, judges, lawyers, journalists, consultants, standard setters, central banks, and financial advisors operating across “linked ecologies” (Fourcade and Khurana Reference Fourcade and Khurana2013).

The knowledge commons underpinning corporate governance practices were governed by and across these epistemic communities (Haas Reference Haas, Smelser and Baltes2001; Hirschman and Berman Reference Hirschman and Berman2014), whose members were well-aware of both the stakes involved and what others were doing to arrive at a joint interpretive frame that facilitated the institutionalization of a new social norm (Bratton Reference Bratton1989; Davis Reference Davis2009). The creation of this joint interpretive frame enabled the “cognitive” or “cultural” capture of regulators and courts, as well as the strategic promotion of policies in arenas where the new rules of the game could be developed and reinforced (Hirschman and Berman Reference Hirschman and Berman2014). Overall, then, the creation and displacement of rules and social norms in corporate governance can be seen as part of a “strategic project of professional colonization” (Davies Reference Davies2010, 19) that can be studied using the SAF approach developed by Fligstein and McAdam (Reference Fligstein and McAdam2011, Reference Fligstein and McAdam2012).

The combination of the GKC framework and the SAF approach to the shared production and shared governance of knowledge in the domain of corporate governance draws attention to four key issues.

To start with, the exploration of historical and contemporary debates delivers an inherently contingent epistemological basis for knowledge claims regarding ideas of corporate status, architecture, governance, and purpose (Veldman and Willmott Reference Veldman, Willmott, Meyer, Leixnering and Veldman2022), which provides the basis for at least two diverging rule-sets in the domain of corporate governance. Reliance on divergent rule-sets provides a contested basis, particularly in an international comparative setting, for resolving claims concerning corporate ownership; corporate assets and liabilities; authority and control; and the mandate, role, and position of managers, directors, shareholders, creditors, employees, and broader stakeholders (Horwitz Reference Horwitz1992; Hatchuel and Segrestin Reference Hatchuel and Segrestin2019). The question of how knowledge claims regarding these diverging rule-sets is formed and transmitted deserves further academic attention (Pistor Reference Pistor2019; Nordberg Reference Nordberg2020; Gindis and Micheler Reference Gindis and Micheler2024).

In addition, the contingent epistemological basis for knowledge claims invites research into the processes of contestation and stabilization, with special attention to the ways in which specific social norms and rule-sets become established as core, high-status, or legitimate knowledge (Fligstein and McAdam Reference Fligstein and McAdam2011, Reference Fligstein and McAdam2012; Hirschman and Berman Reference Hirschman and Berman2014). Similarly, we need to know more about how systemic closure and self-referentiality of knowledge claims in corporate governance work (Deakin Reference Deakin, Baars and Spicer2017, Reference Deakin, Clarke, O’Brien and O’Kelley2019), given high barriers for stakeholders operating outside the “small worlds of corporate governance” (Kogut Reference Kogut2012) to engage in meaningful debate concerning the formation of these knowledge claims (Veldman and Willmott 2020). What we need is anthropological and sociological research into how epistemic communities are organized, how they acquire and maintain definitional control over knowledge claims, and why they coalesce around specific rule-sets (Miller and Rose Reference Miller and Rose1990; Latour Reference Latour2010). Such approaches can be usefully connected with historical research (Gindis, Reference Gindis2020a, Reference Gindis2020b; Johnston Reference Johnston2024) and with studies of performativity in law and economics (Roy Reference Roy1999; Van Horn Reference Van Horn, Mirowski and Plehwe2009; Fourcade and Khurana Reference Fourcade and Khurana2013; Ash et al. Reference Ash, Chen and Naidu2025).

A third issue that a combined GKC–SAF approach brings to the fore is the exploration of alternatives. The rule-set associated with the pre-1970s social norm is very much compatible with the idea of the corporation as commons: “a shared resource whose sustainability depends on the participation of multiple constituencies in its governance (not just shareholders, but employees, core suppliers and customers)” (Deakin Reference Deakin2012, 339). Corporate governance, from this perspective, is a rule-set developed under a social norm that underpins notions of corporate status, architecture, governance, and purpose that help reconciliate multiple and overlapping ownership claims, through rules mutually agreed by all participants, for the preservation of the shared resource on which they all depend (Deakin Reference Deakin, Clarke, O’Brien and O’Kelley2019). In this framing, the purpose of the corporation is to “deliver benefits for all of its stakeholders and for society as a whole” (Deakin Reference Deakin2012, 339). Further exploration of the corporation-as-commons rule-set and the associated governance norms may in principle help understanding polycentric organizational designs, in which the orientation of managerial duties towards the interests of broader sets of stakeholders helps overcome collective action problems in our present organizational and societal context (Ostrom Reference Ostrom1990; Wuisman Reference Wuisman and Debeuker2018; Aguilera et al. Reference Aguilera, Aragón-Correa, Marano and Tashman2021; Baldwin et al. Reference Baldwin, Thiel, McGinnis and Kellner2024).

In this context, the final point to note here is that there is much to gain from the general GKC concern with the content, quality, and consequences of the production of knowledge resources. The adoption of specific position, boundary, choice, aggregation, and information rules in the domain of corporate governance is directly related to the relevance, salience, and distribution of roles and functions, the constitution and operation of (hierarchical) relationships, and the resources, claims, rights, obligations, protections, risks, liabilities, rewards, interests, time frames, and capacities of actors. Likewise, payoff and scope rules are directly related to the distribution of risks, liabilities, protections, and rewards. Knowledge claims about the rule-sets of corporate governance have definitional, positional, and exclusionary effects (Veldman Reference Veldman, Jessen, Barnow and Popp-Madsen2025).

The creation and settling of knowledge claims regarding these rules is therefore intimately connected with very significant socio-economic effects at both the organizational and the macroeconomic levels (Perrow Reference Perrow2002; Ireland Reference Ireland2005). And beyond these organizational outcomes, the example of Larry Fink makes clear that the capacity to establish or change the content and scope of an abstract concept like “fiduciary duties” is closely related to the real-world mandate for CEOs seeking to engage with stakeholders and various long-term interests. The content, quality, and consequences of debates that settle contingent knowledge claims in corporate governance are thus closely associated with the capacity of practitioners to engage with externalities, notably “grand challenges” like climate change and the overshooting of planetary boundaries (Veldman Reference Veldman2024). The GKC framework, especially in combination of the SAF approach, enhances our analytical and empirical ability to explore the process of knowledge construction in interconnected epistemic communities. This can improve our understanding of how knowledge claims shape the conditions of possibility for actors in corporate governance to engage effectively with the grand challenges we face.

7.6 Conclusions

The GKC framework questions about the content, quality, and consequences of the creation of knowledge in corporate governance. Combined with the SAF approach, this framework can help reveal how the development and institutionalization of knowledge claims about corporate status, architecture, governance, and purpose are based on active and often strategic processes of knowledge formation taking place in interconnected epistemic communities. This perspective can usefully explain how two historically contingent social norms informed the formation of distinct configurations of corporate governance rules.

An exploration of these diverging rule-sets, as well as the agency involved in their adoption and institutionalization, contributes to advancing ongoing debates in management and organization studies, including those that focus on the connections between governance design and collective action problems (Klein et al. Reference Klein, Mahoney, McGahan and Pitelis2019); self-interest, collective interest, and short-term versus long-term interest (Olson Reference Olson1965); team production, firm-specific investments, and holdup problems faced by specific stakeholders (Grandori Reference Grandori2010); and the ability of managers to motivate, foster, and maintain stakeholders’ trust and cooperative relationships necessary for joint value creation (Bridoux and Stoelhorst Reference Bridoux and Stoelhorst2022a, Reference Bridoux and Stoelhorst2022b).

Beyond debates about (shared) value creation in individual organizations, developing applications of the GKC framework in the broader institutional context of corporate governance can contribute to research into the conditions for fostering cooperation in theories of market transformation (Nijhof et al. Reference Nijhof, Wins, Argyrou and Chevrollier2022). Ultimately, the GKC framework helps us link an epistemological discussion about the inherently contingent basis of knowledge formation and institutional design, and a justification for enhancing the participation of stakeholders in processes of knowledge creation, sharing, and governance.