Our societies are all scarred by Milton Friedman’s creed that “the social responsibility of business is to increase its profits”; our economies are all wounded by corporations’ obsessive pursuit for short-term profit maximization; regrettably, we all pay the price of dodgy and excessive corporate risk taking at the expense of long-term reasonable wealth creation and distribution.
“After the financial crisis, there has been considerable debate about the role of corporations in society. It has become broadly accepted that corporations – particularly the world’s largest publicly traded corporations – need to be governed with respect for the society and the environment. This is because corporations are dependent on the broader institutional and systemic framing for their long-term survival and because the most pressing of society’s problems cannot be solved without a contribution from corporations or by regulation alone. However, this consensus has not yet been reflected in mainstream corporate governance models that have been narrowing since the 1970s in order to put the maximisation of shareholder value at the centre of corporate attention.”
The above passage is an opening paragraph of Corporate Governance for a Changing World – a (open-access) report which is the outcome of the global consultations of over 260 academics, policy makers, practitioners, and civil society activists conducted as part of the Purpose of the Corporation Project, aimed at elaborating desired principles of corporate governance to cope with the destructive consequences of neoliberal-economistic-business thinking in the face of the challenges of the 21st century political economy and business climate.
The fruits of the recently held discussions at the Creating Sustainable Companies Summit have been synthesized into this report by Jeroen Veldman, Filip Gregor, and Paige Morrow, presenting options available to corporations, investors and policy-makers to create an institutional framework for corporate governance that supports a broad understanding of corporate purpose, fosters a focus of corporate strategy on long-term sustainable value, and allows the alignment between corporate strategies and the broader interests of society by taking account of systemic risks such as growing inequality and climate change.
You are welcome to delve into this report, join its important cause and spread the word.
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