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Company directors: what are your real responsibilities?
Two posts on corpgov.net have caught my eye this week:
Together, these articles present a significant challenge to the corporate governance community, and company directors in particular. To most Boards, the purpose of the company is to achieve growth and to maximise shareholder value, period. But is this narrow focus appropriate? Does it help society, or does it add to its burdens?
As I read the articles, I found myself thinking about the relationship between economic growth and societal wellbeing. You don't have to be a rocket scientist to understand that a narrow focus on profit or growth is a rather selfish win/lose strategy. Shareholders win and the rest of us lose. Is that fair? Perhaps Boards should be compelled to take account of wider societal factors as they fulfil their important role. What do you think?
- Beyond Growth: Do corporations have any responsibility to ensure growth helps the majority?
- Maximising Shareholder value: The workaround from Bartley J Madden
Together, these articles present a significant challenge to the corporate governance community, and company directors in particular. To most Boards, the purpose of the company is to achieve growth and to maximise shareholder value, period. But is this narrow focus appropriate? Does it help society, or does it add to its burdens?
As I read the articles, I found myself thinking about the relationship between economic growth and societal wellbeing. You don't have to be a rocket scientist to understand that a narrow focus on profit or growth is a rather selfish win/lose strategy. Shareholders win and the rest of us lose. Is that fair? Perhaps Boards should be compelled to take account of wider societal factors as they fulfil their important role. What do you think?
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