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Corporations with a conscience

Since the breakdown of managerial capitalism in the 1970s, a corporate-governance model based on shareholder primacy has reigned supreme. But now that America’ s top CEOs have publicly embraced a broader “stakeholder” model, is capitalism entering a new chapter?

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In the latest Big Picture on The Rooftop’s opinion partners Project Syndicate, Nobel laureate economist Joseph E. Stiglitz welcomes Big Business’ s new party line, but wonders whether it is sincere, or even feasible in the absence of major legislative reforms.

Likewise, Columbia Law School’s Katharina Pistor points out that America’s CEOs are likely driven as much by self-preservation as by concerns for the greater good.

But regardless of ulterior motives, notes Nobel laureate economist Michael Spence, the stakeholder model is becoming increasingly good for business.

And as Bertrand Badre of Blue Like an Orange Sustainable Capital contends, climate change, the rise of populism, and other global developments are quickly rendering shareholder primacy unworkable.

Here on The Rooftop, we’ve been covering the rise of social enterprises for almost a year now. From household names such as The Big Issue investing in mental health support, to smaller ventures, social enterprise is for all. And as the export of Scottish advice to Indonesia and the rise of social enterprise in Ethiopia show, there is much to celebrate.

In Ethiopia next month, more than 1,200 delegates from around the world are expected to attend the Social Enterprise World Forum, in order to learn, share and network with each other.

The full programme for this year which blends African traditional social enterprise perspectives with future technological trends has been announced on the event website www.sewf2019.org.

Part of this article was supplied via Project Syndicate, the World’s Opinion Page. To subscribe visit https://www.project-syndicate.org/order/subscription.

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