The Modern Corporation

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The Modern Corporation Project, run by Prof. Hugh Willmott and Dr. Jeroen Veldman at Cass Business School, City University, seeks to connect corporate governance to political economy. By linking the theory and practice of corporate governance, it welcomes the development of a wide-ranging debate on the the nature and consequences of contemporary corporate governance theory and practice. Its contributors are leading practitioners and international academics from the fields of Company Law, Economics, Accounting, Management and Politics. This website presents succinct and authoritative statements on corporate governance, and notably on the effects of shareholder value, prepared and endorsed by these contributors.

Background

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 – need to be governed with respect for the society and the environment. This is because corporations are dependent on the broader institutional and systemic framing for their long-term survival and because the most pressing of society’s problems cannot be solved without a contribution from corporations or by regulation alone.

However, this consensus has not yet been reflected in mainstream corporate governance models that have been narrowing since the 1970s in order to put the maximisation of shareholder value at the centre of corporate attention. As a result, the normative and theoretical framework of corporate governance theory and practice continue to encourage excessive risk taking at the expense of corporate resilience and the ability to create long-term sustainable value. This framework takes away a focus on investment in R&D and innovation, and in human and social capital. It also diminishes the capacity of corporations to anticipate and mitigate systemic risks. Beyond corporations, this model for corporate governance damages the interests of long-term shareholders and their end beneficiaries as well as States. In a broader sense, it contributes to rising inequality within firms and in society at large, and to a range of negative environmental and social impacts.

With this context in mind, the Purpose of the Corporation Project, an initiative of Frank Bold with the support of the Modern Corporation Project at Cass Business School, launched the Corporate Governance for a Changing World Roundtable Series on corporate governance. Leading international academics from the fields of Company LawEconomicsAccountingManagement and Politics provided succinct and authoritative statements on corporate governance, and notably on the effects of shareholder value.

The statements provided a first step to open up a broad debate involving all stakeholders in the corporate governance domain. This project was advanced in February 2014 when the Modern Corporation Project together with the Purpose of the Corporation Project, run by the Frank Bold Society, organized a conference in the European Parliament, which brought together senior businesspeople, politicians, NGO representatives, trade unionists, shareholder representatives, accounting and regulation body representatives, journalists, and academics to discuss and develop initiatives for improved corporate governance.

Between 2014 and 2016 we organized a series of international roundtables with senior practitioners, regulators, standard setters, and academics in London, New York, Zurich, Amsterdam, Paris, and Oslo. These brought together more than 260 leaders in business management, investment, regulation and academic and civil society communities with the aim of identifying desired outcomes and principles of corporate governance fit for the challenges of the 21st century.

On September 28, 2016 we concluded this series of roundtables with a conference in Brussels, which brought together more than 30 high level speakers and over 140 participants. Keynote speeches were 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.

At the Creating Sustainable Companies Summit we published our report, summarizing the main recommendations from the roundtables and providing a comprehensive approach to pressing issues in the field of corporate governance.

Coverage of our activities: