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From Stockholders & Stakeholders

Duration: 2 Days

Overview

Outline

Recent trends in the evolution of corporate purpose indicate that there is a fundamental shift underway on how companies are viewed and governed.

 

Fifty years ago, the Nobel Prize winning economist Milton Friedman steered corporate thinking towards maximising shareholder value. This approach served well for a few decades in that it helped to propel businesses to optimise resources, pursue operational efficiencies, drive innovation and explore new markets. However, it also introduced some negative and detrimental practices, not least a rampant disregard of the impact on the environmental and the uneven distribution of wealth within society.

 

Recognising the growing socioeconomic and environmental disparities, the prestigious US-based Business Roundtable group put out a revolutionary idea in 2019 that corporate purpose should incorporate ESG (Environmental, Corporate and Social) factors; effectively widening the corporate responsibility from stockholders to an array of stakeholders.

 

This course provides an insight into the implications of this trend and helps the participants become aware of the new factors they need to prepare for and address. It utilises case studies of companies who are at the forefront of these initiatives as well practical exercises.

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Historical Perspective

  • Overview of corporate history: from ancient to modern times

  • What exactly did Milton Friedman state and mean?

  • Types and ranges of corporate models

  • Economic, social, environmental and governance factors that have influenced corporate purpose

What instigated the re-evaluation of purpose?

  • The effects and impacts of economic changes in recent times

  • Globalisation and revolution in supply chains

  • Universality of customers and suppliers

  • Geopolitical changes

  • Distribution of wealth and the depletion of resources

  • Growing importance of sustainability

New Ideas and Approaches

  • Growing movements towards greater corporate responsibility

  • The Business Roundtable and Davos Manifestos

  • The concept of Stakeholder capitalism

Refocusing the way you operate

  • How does this trend impact your business?

  • What stakeholders and how should they be viewed and addressed?

  • Operational and supply chain considerations

  • Embedding awareness and practices in your management activities

  • Defining new governance processes

Challenges and Hurdles of Widening the Purpose

  • Need for balance: Shareholders Vs Stakeholders

  • Managing investors’ expectations

  • Source of capital and funding

  • Data capture and reporting considerations

How will it all evolve?

  • Where is it all heading?

  • What are the best practices?

  • Examples of companies at the forefront of this initiative

  • Will this shift become enshrined in legislation?

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