On September 28, Frank Bold will hold the Creating Sustainable Companies Summit gathering leading thinkers, businesses, policymakers and civil society in Brussels to chart the way to the next generation of corporations and future of corporate governance.
Keynote speeches will be delivered by Věra Jourová, EU Commissioner for Justice, Consumers and Gender Equality; John Kay, well known author, economist and columnist at Financial Times; and Richard Howitt, MEP and incoming CEO of the International Integrated Reporting Council. In total, more than 30 high level speakers and over 140 participants will discuss a corporate governance framework that fosters the creation of inclusive and sustainable businesses. See the complete list here: http://summit2016.purposeofcorporation.org/#speakers.
On this occasion, a major report entitled Corporate Governance for a Changing World: Report of a Global Roundtable Series will be released. Following the outcome of a global consultation as part of the Purpose of the Corporation Project, the report aims to capture long-term sustainable value and identify desired outcomes and principles of corporate governance fit for the challenges of the 21st century. Over the past two years, more than 260 leaders in business management, investment, regulation, academic and civil society communities were brought together at events in Breukelen (the Netherlands), Brussels, London, New York, Oslo, Paris, and Zurich.
The report is available here: http://www.purposeofcorporation.org/corporate-governance-for-a-changing-world_report.pdf
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 – should be governed with respect for the society and the environment. This is because corporations are dependent on the broader institutional and systemic framework within which they operate for their long-term survival. In addition, the most pressing of society’s problems cannot be solved by regulation alone without contributions from corporations, such as the attainment of the UN Sustainable Development Goals.
The current model of corporate governance has led companies to focus on maximising short-term shareholder value. This has a range of unintended consequences: inappropriate focus on the short-term, excessive executive pay, underestimation of systemic risks and undermines corporate resilience by redirecting corporate resources away from innovation, development, and human capital. Ignoring the long-term interests of corporations and of the society also hurts investors and end beneficiaries with a long-term horizon for their investment, mostly people who are saving to fund retirement or support their children’s education
In 2012, John Kay, keynote speaker at the summit, wrote : “Short-termism, or myopic behaviour, is the natural human tendency to make decisions in search of immediate gratification at the expense of future returns, decisions which we subsequently regret”.
With this context in mind, the global roundtables series sought to answer a number of central questions. The results have been synthesised in the report:
How can corporate governance contribute to robust long-term value creation for companies?
What is the role of stakeholders, including shareholders, in fostering a long-term focus on sustainable behaviour?
What incentives for short-termism exist in law, corporate governance codes and business practice?
The report presents a summary of reflections on these questions and best practices in seven areas:
The report presents an emerging comprehensive approach to corporate governance that can assist corporations to develop a broad understanding of their purpose, as well as build a corporate strategy that will deliver long-term sustainable value, build organisational resilience, and sustain a strong social license. This approach can be beneficial to a wide set of stakeholders who take part in or are affected by corporate governance, as it aligns corporate strategy with the broader interests of society by taking account of systemic risks such as climate change and growing inequality.
About Frank Bold
Frank Bold is a purpose-driven law firm with offices in the Czech Republic, Belgium and Poland. The firm uses the power of business and non-profit approaches to solve social and environmental problems. Together with the Modern Corporation, a project based at Cass Business School, it leads the Purpose of the Corporation Project, a strategic and open-source platform for leading thinkers and organisations interested in promoting the long-term health and sustainability of companies. Frank Bold provides legal expertise in corporate accountability and corporate governance to the European institutions as well as to civil society, municipalities, and businesses.
Susanna Arus, Communication and Events Officer at Frank Bold
susanna.arus@frankbold.org // 0032 485734107
More information: http://summit2016.purposeofcorporation.org
Frank Bold organised two online events to present the results of the research on the disclosures made by 300 companies on climate and environmental matters providing targeted presentation and insights for companies in Southern Europe and Central and Eastern Europe.
On Tuesday, October 6th, Filip Gregor, Head of our Responsible Companies section spoke at the conference on ‘Global Supply Chains - Global Responsibility: Human Rights and Decent Work in Global Supply Chains’ organised by the German Ministry of Labour and Social Affairs on the occasion of the German EU Council presidency.
Executive Vice President Valdis Dombrovskis already announced in January that following the publication of the Green Deal and the initiation of the revision of the EU Non-Financial Reporting Directive (NFRD), he would invite EFRAG to “undertake preparatory work for the elaboration of possible EU non-financial reporting standards”.
