09-08-2026
The creation of the modern corporation gave societies “an instrument to separate ownership and control,” says Michael Woronoff, retired partner at Kirkland & Ellis and a Business Fellow at the Mitch Daniels School of Business. Corporations and free markets became part of a flywheel in a revolution of thought that included democratic governance that has helped to reduce poverty, improve human flourishing and increased liberty around the world, Woronoff argues.
Woronoff will join Mitch Daniels, interim president of Purdue University and former governor of Indiana, and Ambassador Kristen Silverberg, president and COO of Business Roundtable, to discuss the evolution of corporations at the upcoming Cornerstone for Business conference. Jim Bullard, the Dr. Samuel R. Allen Dean of the Daniels School, will moderate.
Woronoff is especially interested in the conference’s willingness to place the corporation within a broader discussion of capitalism’s moral value.
“The rise of the corporation and free markets facilitated the efficient allocation of resources, creating an environment conducive to innovation,” Woronoff says. “The resulting economic growth produced an unprecedented reduction in poverty and expansion in political freedom across the globe.”
In his view, the modern corporation was itself a crucial institutional innovation because it enabled the aggregation of capital at a scale that earlier economic systems could not easily support. By separating ownership from management, corporations made it possible for investors to provide capital, managers to operate enterprises and boards of directors to oversee the stewardship of shareholders’ resources.
Woronoff’s career gives him a firsthand view of how corporate boards make decisions. The public conversation, he says, mischaracterizes how boards work. The perception is that boards are having philosophical debates instead of making decisions about keeping the business healthy.
"Directors usually try to make durable decisions that benefit the enterprise,” Woronoff says. “That means understanding that long-term shareholder value often depends on how a company treats employees, customers, counterparties and the communities in which it operates.”
A company that underpays employees, mistreats customers or compromises its reputation may see short-term gains, but it weakens its ability to compete over time. For that reason, Woronoff argues, attention to employee, customer and community interests need not be treated as a departure from shareholder-focused governance. It is often fundamental to building a healthy, sustainable enterprise.
Still, he cautions against losing sight of accountability. A board cannot effectively operate, he argues, if it is understood to owe the same duty to every possible stakeholder at once. The board’s responsibility is to create a coherent long-term strategy to maximize value for its owners — while operating ethically and recognizing that trust, reputation and productive relationships are essential to lasting success.
Increasingly, government and citizens are strapping corporations with an expanding list of social, political and cultural responsibilities that corporations are expected to address in addition to their central function.
“Corporations are increasingly expected to serve some broad, undefined social purpose,” he says. “In addition to producing goods, services, returns and jobs, they are now often asked to resolve questions about climate, labor, equity and geopolitics that government has failed to address.”
Yes, corporations should act responsibly or ethically, but Woronoff worries about the tendency to use private businesses as vehicles for goals that elected institutions have been unable to achieve through legislation. That pressure can come from across the political spectrum, he said, whether it takes the form of ESG mandates, social-justice priorities, industrial policy or appeals to a vaguely defined “common good.”
The danger, as he sees it, is that businesses can become subject to rapidly changing political demands rather than focusing on their central mission: creating long-term value for their shareholders through successful, ethical enterprises.
“Corporations should not pretend to replace democratic institutions,” Woronoff said. “The real opportunity for corporations to serve society lies in doing what they do best: creating value, investing for the long term, generating opportunity and operating with integrity inside a sound moral and legal framework.”
Woronoff hopes conference attendees will take away that “being a business leader is a noble pursuit.” The corporate enterprise operating in a free market leads to transactions where both sides say “thank you,” he notes.
Woronoff acknowledges that fraud, misconduct and poor management exist. But he argues that it is a mistake to treat corporate enterprise itself as inherently suspect — or to assume that a business must abandon its central mission in order to contribute constructively to society.
The conference roundtable will invite participants to wrestle with those questions directly: can corporations create long-term value while operating ethically; how public expectations of companies have changed; and what governance principles can help organizations remain accountable amid political, economic and cultural pressure.
Corporations can make their most enduring contribution to society by doing the work they are uniquely designed to do well, says Woronoff.
“That’s not a cop-out,” he said. “It’s the system that built the modern world.”
