Total Governance: How Technology Is Transforming Corporate Power And Accountability

Our new article, ‘Total Governance,’ introduces an innovative framework explaining how digital technologies and online communications are fundamentally reshaping corporate accountability.

The article's core insight is that social media, mobile investing apps, and global stakeholder coordination via online technology enable individuals to engage with corporations in multiple roles at once. A person can act as a shareholder (possibly through commission-free investing apps), coordinate with employees through social media, organize consumer boycotts online, and mobilize community activism through digital platforms. In ‘total governance,’ individuals influence corporate governance through diverse and overlapping roles, just like in ‘total football’ tactics, where players fluidly change positions instead of remaining in fixed roles.

The Digital Revolution in Corporate Governance

Several technological developments make total governance particularly relevant today. Mobile-first, commission-free investing platforms have democratized access to share ownership, enabling individuals to build diversified portfolios with minimal transaction costs. Social media allows for instantaneous coordination among stakeholders worldwide, breaking down traditional barriers to collective action. Online communities facilitate information sharing about corporate behavior, while digital tools empower stakeholders to organize collective action on an unprecedented scale.

Recent data illustrates this technological transformation. Almost half of Gen Z respondents gather investment information primarily through social media. Online communities coordinate shareholder voting, consumer boycotts, and employee actions. Digital platforms enable real-time tracking of corporate behavior and immediate stakeholder responses. This technological infrastructure allows stakeholders to overcome traditional collective action problems that have historically limited their influence.

Beyond Traditional Governance in a Digital Age

Traditional corporate governance theory assumes that different stakeholder roles represent distinct groups of actors. Shareholders are presumed to be only shareholders, with narrow financial interests that conflict with those of bondholders, employees, customers, suppliers, and neighbors, each regarded as separate interest groups. However, this separation has never been true; many corporate actors hold multiple roles. For instance, most shares are held in portfolios that also include bonds and shares of competing companies. Likewise, employees have significant interests in these portfolios through retirement funds and increasingly through direct investments. Furthermore, investors are also likely to be consumers, suppliers, or neighbors who are affected by and reliant on the corporation in various overlapping ways.

Moreover, conventional theory ignores the possibility of coordination across stakeholder groups, presumably because it is impractical. The rise of digital technologies completely upends this assumption. Through online platforms, stakeholders can instantly share information, coordinate actions, and exert pressure across multiple channels simultaneously—and in their multiple interests through multiple roles, not merely as stock-market participants. Especially in relatively competitive markets, these coordinated actions can influence managers in undertheorized ways.

According to the conventional view, shareholders mainly influence the corporation through trading. Although shareholders can vote for directors, on advisory resolutions, and to confirm (or reject) changes to the corporation’s Articles, their votes are largely insignificant during normal times. Instead, shareholders influence the company through its stock price. Stock market participants, whether they are shareholders of that specific corporation or not, drive the stock price up or down based on their perceptions of its future prospects and current management. Increases in stock price benefit managers and simplify their roles, while decreases might attract hostile takeovers. Importantly, this mechanism enables stock investors to push firms toward maximizing share value, but it ensures that any other values they may hold will drop out of corporate governance.

The paper points out that online coordination may create novel forms of influence towards an unrecognized diversity of ends. While a small shareholder's vote alone carries little weight, that same person can now coordinate digitally with thousands of others acting as employees, consumers, and community activists. Social media amplifies these actions, creating pressure that companies find increasingly difficult to ignore. The ability to rapidly share information and coordinate responses gives stakeholders unprecedented leverage.  And the manifold routes to influence managers allow stakeholders to express values other than, and even conflicting with, the short-term share value focus of the stock market.  

The Digital Infrastructure of Multi-Stakeholder Coordination

Total governance proves especially effective when supported by robust digital infrastructure. Online platforms enable employees to share workplace experiences globally, overcoming traditional information asymmetries. Mobile apps allow consumers to shift purchasing patterns and coordinate boycotts instantly. Social media campaigns can rapidly mobilize community responses.

Consider how technology transforms responses to corporate environmental practices. Employees share internal information through secure platforms, exposing gaps between public commitments and actual practices. Consumers coordinate boycotts through social media, amplifying individual actions into significant market pressures. Community groups organize digital protests that quickly gain global attention. Investors use mobile apps to divest, sending immediate market signals. All these actions, coordinated through digital channels, can create unprecedented pressure for corporate change.

On the other hand, information quality on social media remains a crucial concern, as misinformation can spread rapidly through digital networks. The article proposes several technology-based solutions, including corporate-hosted digital forums for verified information sharing, online platforms for stakeholder education, and digital mechanisms for direct stakeholder engagement.

The Role of New Generations

The effectiveness of total governance is amplified by generational change. Millennials and Gen Z, as digital natives, naturally leverage multiple platforms to coordinate their actions. Research shows that these generations are far more likely to consider environmental and social factors in their economic decisions. About 17% report changing jobs based on environmental concerns, while over 80% consider ESG factors when investing. Most importantly, they demonstrate a willingness to coordinate their actions across different stakeholder roles—boycotting products, switching employers, and divesting from companies that don't align with their values.

Looking Ahead

Total governance represents a technology-driven shift in corporate accountability. It harnesses the power of digital platforms to enable coordinated multi-stakeholder activism.

The implications are far-reaching. Companies must adapt to a world where stakeholder coordination happens at the speed of social media. Traditional corporate communication channels are being supplemented or replaced by direct digital engagement. The boundaries between different stakeholder groups are increasingly fluid, requiring new approaches to stakeholder relations.

As digital natives inherit trillions in wealth and ascend to leadership positions, their facility with technology and willingness to leverage multiple stakeholder roles will reshape corporate behavior. Companies that adapt to this digital reality - building robust online engagement channels and responding authentically to digitally coordinated stakeholder concerns - will be better positioned for success.

The total governance framework illuminates how technology is transforming corporate accountability and suggests ways that digital tools can serve productive ends. While not a complete solution, it marks an important step toward a governance model that reflects our increasingly connected world.

Sergio Alberto Gramitto Ricci is Associate Professor of Law at Hofstra University Law Faculty.

Daniel J.H. Greenwood is Professor of Law at Hofstra University Law Faculty.

The full article is available here.