Sattva Consulting
Corporate Governance: From shareholders to stakeholders
Corporate Governance: From shareholders to stakeholders

Corporate Governance: From shareholders to stakeholders

– by Arnab Mukherjee

According to a survey published by the United Nations Global Compact and Accenture, a mere 21% CEOs (out of 1000 global CEOs surveyed) believe business is playing a critical role in contributing to the global sustainability goals.

The good news – in the same survey – is that CEOs believe there is real opportunity for the global business community to drive sustainable growth, efficiency, innovation and hence for reputation building.

This is reflected in a gradual shift in the mindset of leaders from creating value for just shareholders, to creating value for all stakeholders of the business, including shareholders, customers, suppliers, employees and local communities. This is increasingly being recognised as essential for the long-term success of a business.

Opinion on this aspect of corporate governance has shifted continually throughout the latter part of the 20th century. Shareholder primacy reigned supreme during the 70s with the theories of the renowned Nobel -laureate Milton Friedman. In recent times however, due largely to wide-ranging environmental issues, stakeholder capitalism is gradually gaining ground with support from economists such as Joseph Stiglitz.

Stakeholder value creation and long-term success of an organisation in a future fraught with uncertainties can only be ensured through the building of a sustainable business.

As we continue to push the tolerance limits of the earth’s ecosystems, we foresee a future where regulations will need to be tighter to prevent an ecological collapse. A sustainable business hence is one that not only abides by present day regulations but also prepares itself for the shrinking operating spaces created by tighter regulatory regimes and restricted resource availability in the future.

Read the full blog, here.

Arnab Mukherjee is a Senior Knowledge Manager at Sattva, responsible for institutionalising Knowledge Management within the organisation. Before Sattva he has worked at Capgemini, Boston Consulting Group and Bain & Company. He has a B.Sc. as well as a B.Tech from Jadavpur University.

Sattva has been working with various corporate clients to help them define their social impact goals and maximise the return on social investment. Our focus is to solve critical problems and find scalable solutions. Several corporates have been a partner to many such collaborations where effective CSR programmes have strategically aligned with business and have provided meaningful solutions to social issues.

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