Corporate Law in the Global South: Heterodox Stakeholderism

How do the corporate laws of Global South jurisdictions differ from their Global North counterparts? Prevailing stereotypes depict the corporate laws of developing countries as either antiquated or plagued by problems of enforcement and misfit despite formal convergence. This Article offers a different view by showing how Global South jurisdictions have pioneered heterodox stakeholder approaches in corporate law, such as the erosion of limited liability for purposes of stakeholder protection in Brazil and India, the adoption of mandatory corporate social responsibility in Indonesia and India, and a large-scale program of Black corporate ownership and empowerment in South Africa, among many others. By incorporating broader public policy and distribution objectives into corporate law, heterodox stakeholderism can be interpreted as an institutional adaptation—be it sensible or misguided—to a context of high inequality and externalities that remain unaddressed through other areas of law. As the rise of inequality and growing distrust of the state’s ability to tackle social and environmental concerns have brought the Global North closer to the Global South’s realities, the resurgent interest in stakeholderism in the developed world constitutes a surprising form of “reverse convergence” that merits greater attention. Finally, heterodox stakeholderism in the Global South also responds to critical, but heretofore neglected, distributional implications of corporate law rules, such as limited liability for environmental harm caused by corporate subsidiaries, which tend to enrich Global North companies and investors at the expense of Global South victims. These findings have implications for ongoing debates in corporate law, comparative law, law and development, and business and human rights.