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Business leadership in society

Beyond ESG – Collaborative Governance the Next Challenge to Business

The pandemic and growing climate crisis have thrown into sharp relief the critical role large firms now play in society, not just as economic entities, but as key social institutions expected to work with and alongside government to address the myriad of systemic challenges now facing us, from climate change to inequality. In his 2018 letter to CEOs, Larry Fink, CEO of BlackRock, the world’s largest institutional investor globally, summarized this new role for business well: “We… see many governments failing to prepare for the future…As a result, society increasingly is turning to the private sector and asking that companies…

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Corporate structure is neither the problem nor the solution to increasing sustainability

Some people say the solution to the ESG challenge is to embed social-purpose statements into corporate charters, and that this will oblige companies to consider all stakeholders and to measure and report on their social effect. This sounds good – but as we engage business in trying to meet the sustainability challenge, is corporate structure the right place to focus?

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The Six New Rules of Business

A Review

“Tell me which of the pressing issues of our time keep you awake at night, and I will tell you how the old rules of profit maximization and short-term thinking contribute to those problems,” Judy Samuelson writes in the introduction to her new book, The Six New Rules of Business: Creating Real Value in a Changing World. The rules are changing. The COVID-19 pandemic and other recent crises have made it clear that business and society are more intertwined than ever before, and the old notions of “what is good for business” are no longer sustainable for society – or…

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Pandemic and political crises reveal new role and challenges for business

The current pandemic and growing climate crises have thrown into sharp relief the critical role large firms now play in society, not just as economic entities, but as key social institutions and political actors. A decade ago, would we have imagined a scenario where business organizations are on the front lines of the fight to preserve democracy and to remove a president from office? (“This is chaos,” a statement from the conservative American Manufacturers Association read. “This is sedition and should be treated as such. The outgoing president incited violence in an attempt to retain power.”) Would we have anticipated…

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Businesses and BLM – Evaluating their commitment

The last few months have seen a moment of national reckoning, as Americans confront the racial inequalities that have underpinned society for centuries. And the corporate world is finding that it can no longer stand on the sidelines. As consumers increasingly expect businesses to take greater responsibility for their impact on society, companies have begun more and more to speak out on a wide range of social, environmental and political issues. As the May 25th murder of George Floyd by police, the latest in a long list of brutalities and injustices perpetrated against the black community, sparked a wave of…

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HMI launches database of global corporate responsibility initiatives

BOSTON – High Meadows Institute is excited to announce the launch of the Business Leadership in Society Database, a comprehensive new resource for tracking and assessing industry associations and partnerships promoting responsible business leadership. Developed by High Meadow Institute, with support from KKS Advisors, the database profiles over 200 initiatives, operating both nationally and globally and will officially launch June 3. Self-regulatory initiatives that address major Environmental, Social and Governance (ESG) issues have become an increasingly important contributor in setting standards for corporate social responsibility in the 21st century. While the number of these initiatives is rapidly growing, there is…

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BlackRock drives a tipping point on climate action

Larry Fink’s 2020 CEO letter and his commitment that BlackRock will now be front and forward on climate change across all of BlackRock’s assets under management represents a critical turning point in the climate fight. As the world’s largest asset manager, with $7 trillion under management, BlackRock’s leadership will now put pressure on State Street and Vanguard, the other two members of the big three asset managers, to follow suit. Together, these three firms are the majority shareholders in 88% of the S&P 500, with the power to dramatically influence corporate behavior and ensure climate change is on the agenda of every corporate…

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Modernizing modern portfolio theory

The following blog by HMI Senior Fellow Jon Lukomnik and Jim Hawley, the Head of Applied Research at Truvalue Labs, is a modified version of an article requested by the Principles for Responsible Investment. It is a “preview” of the book the two are researching and writing for Routledge. The anticipated publication date is late 2020 or early 2021. Modern portfolio theory (MPT) – the dominant investment paradigm across the world – is in major need of a refresh. Simply put, MPT is not up to the challenges that confront today’s investors. Although this widely-accepted Nobel Prize-winning financial theory enriched…

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Is It Time to Rethink Corporate Governance?

  For the last fifty years, the mandate and role for corporate governance have been set within well-defined boundaries, in which the business of business was business and the well-being of society was the responsibility of governments. This paradigm was summed up succinctly in 1970 by economist Milton Friedman who noted, “There is one and only one social responsibility of business — to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game.” Today, thanks to globalization and the international economy, we live in a world in…

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