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Chapter 2 explores the drivers behind corporate governing, spanning internal organizational dynamics, and broader societal pressures. Within firms, Millennial and Gen Z employees have emerged as a force for change, leveraging social media to advocate for prosocial commitments and ESG priorities. Investors, increasingly treating ESG factors as financially material, have further reshaped strategic expectations. These pressures have begun to challenge shareholder primacy and expand the perceived boundaries of corporate purpose. This chapter also considers the influence of corporate political spending and lobbying in shaping public positioning. In Section B, attention turns to the cultural and political shifts of the mid-to-late 2010s. Movements like Black Lives Matter, #MeToo, the Climate Movement, and March for Our Lives heightened demands for corporate engagement, as did high-profile federal policies under the first Trump administration. Faced with polarization, institutional dysfunction, and declining government responsiveness, many companies stepped into policy vacuums – assuming roles once thought to belong solely to public institutions.
In Corporate Power and the Politics of Change, Matteo Gatti examines how corporations have taken on roles traditionally reserved for governments – advocating on social issues, setting internal norms, and stepping in where public institutions fall short. This phenomenon, called corporate governing, takes two forms: socioeconomic advocacy, when companies take public stances, and government substitution, when they deliver services or protections the state does not provide. Drawing on legal doctrine and insights from the social sciences, Gatti shows how this shift reflects broader pressures within firms and deep dysfunction outside them. The rise of corporate governing has also triggered political, legal, and cultural backlash that challenges its legitimacy and reach. Clear-eyed and timely, this book offers a framework for understanding how corporate power reshapes policymaking and what that means for business and democracy.
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