The 21st century has brought with it profound societal challenges, from disruption to our social and political institutions to global systemic-level threats such as pandemics and climate change. In the face of these challenges, our 20th century governance systems are proving increasingly inadequate and unable to control their economic future, steward the environment and ensure the social well-being of their citizens.

In this context, both the private sector and the civil society sector, working with and alongside governments, must now be recognized as active participants in 21st century governance. Governing and managing the transition from an extractive-consumptive economic model to a sustainable-regenerative model will require extraordinary leadership from all sectors of society and nowhere is leadership more critical than from the private sector. In addition to their financial and human capital resources, the private sector brings experience in management innovation that is critical in developing a framework for 21st century governance.

Beyond ESG: The Role of Business in Collaborative Governance will bring together corporate leaders and partner organizations to explore four key roles for the private sector in 21st century governance and the challenges they pose for business. These include:

  • Moral leadership
  • Self-regulation
  • Delivery of public good and services
  • Business model transformation

If you or your organization are interested in partnering with HMI to work with us on exploring these themes, please get in touch through our contact form.

Read the discussion paper:

Download

Beyond ESG: The Role of Business in Collaborative Governance

This discussion paper explores the context for 21st century governance, examining the forces, from technological innovations to demographic shifts to social and economic changes, that have reshaped our political landscape and transformed society. Delving into each of the four challenges facing corporate leaders, the paper sets out potential research questions based on the framework that HMI will be exploring with its advisors and research partners. This paper is one of a series of discussion papers and reports developed by High Meadows Institute’s Corporate Responsibility Research Project, a three-year program launched in 2020 designed to help chart the path forward for corporate responsibility and leadership in 21st century society.

Projects:

Collaborative Governance in Banking

Since the financial crisis, financial institutions, and in particular, systemically important banks, have been under escalating pressure to take greater responsibility for their impact on society and to influence the behaviors of their clients. That pressure has grown significantly in recent years. Like other large companies, large financial institutions are being asked to define a corporate purpose that goes beyond simply maximizing shareholder value; they are being asked to apply environmental, social and governance (ESG) objectives not only to their own businesses but also to influence their customers through their financing activities. Some governments also increasingly view financial institutions as “transmission mechanisms” for implementing important policy objectives.

Collaborative Governance in Banking, a project in collaboration with Tapestry Networks, explored how expectations for banks’ roles in addressing challenging environmental, social, and economic issues are evolving and sought to identify practices for improving governance and policy in response.

Resources:
Download

Responding to societal challenges: a framework for bank boards and their directors (2023)

As shifts in public sentiment regarding expectations for corporations and financial institutions in addressing social issues continue to challenge corporate governance, the leaders of the largest banks now face decisions about how to respond to a range of societal concerns. This report, based on interviews and advisory board meetings with bank directors, executives and other stakeholders, synthesizes the views of these participants and provides a framework for how bank boards can effectively make decisions about their institutions’ responses to societal challenges.

Project Partner:
Download

CGIB: The role of global banks in collaborative governance (May 2022)

In May 2022, a select group of bank directors met virtually to gather perspectives on changing expectations for financial institutions, the need for effective collaboration between banks and their stakeholders, including investors and between the public and private sectors, and the practical implications for governance structures and processes. This document synthesizes views gathered from initial discussions with bank directors, investors, and other stakeholders and provides background and context for the conversation.

Explore the Themes:

Moral Leadership

Business leaders today are facing greater expectations to take on a role as moral leaders, both within their firms and in society at large. The public now expects them to step in when the government does not fix social problems, to hold themselves accountable to the public and not just to the board of directors or stockholders, and to speak out on issues like climate change, diversity and immigration. This environment creates new risks and opportunities for business leaders and positions them well beyond ESG and responsible business practices within their fence line, to taking leadership on “political” social policy issues.

Related HMI publications:
21st Century Business Leadership and the Rise of Corporate Activism
Download
The Future of the ‘S’ in ESG
Download

Self-regulation

The growth of voluntary “soft law” standards and self-regulatory initiatives has been driven by a global economy and governance environment in which there are few international regulatory standards and in which technological innovation is driving the development of new industries faster than public policy can keep pace. Addressing this regulatory challenge will require business leaders to collaborate and negotiate with their industry peers, external stakeholders and government regulatory agencies to establish both mandated and voluntary regulatory standards for the responsible operation of their industry and firms.

Related HMI publications:
The Role of Industry Associations and Civil Partnerships in Corporate Responsibility
Download
The Role of Trade Associations in ESG
Download

Delivery of Public Goods and Services

Owing to a lack of resources and growing distrust from their citizens, governments throughout the OECD are increasingly unable to meet their obligations to deliver essential public goods and services. The private sector can bring talent, resources and a results-driven mindset and innovation perspective to the table that government frequently lacks. The challenge for business leaders now is to move their firms from a 20th century philanthropic perspective, which saw social issues as the business of governments, to a 21st century perspective focused on partnership and investment.

Related HMI publications:
Business Leadership in Public-Private Partnerships for Public Benefit
Download

Business Model Transformation

The primary governance challenge facing humanity in the 21st century is to move from an industrial, consumptive, growth-focused economic paradigm to a regenerative economic model focused on sustainable well-being. This is an enormous undertaking and will require leadership from all quarters, but none are more important than the private and financial sectors. While the public policy sector can enable change and steer society in the right direction, the real shift in our economic model will rely on private sector disruptive innovation and financial support.