WHICH THEORY OF THE FIRM FOR EU SOCIETY? AN INSTITUTIONAL PERSPECTIVE

Sustainable development along with social market economy represent two founding values of the European Union (EU) as set out by the Lisbon Treaty. Retooling the economy according to these objectives requires a thorough rethinking of the role of business in society. This article highlights that the entity view of the firm is the only one consistent with the socio-economic model that the EU wants to pursue. Importantly, it points out that Lisbon Treaty provides the entity view of the firm with a sound legal background that goes beyond an academic perspective, making the integration of sustainability criteria into the business going concern a requisite to comply with the overall EU institutional setting.